Here’s Problem #1: Trying to “Time” the marketThat really is the truth for ALL of us. When you see the RSI at 30 or 70, you might think it’s
a foregone conclusion the stock MUST turn around by tomorrow.
But that’s
not always the case, and you could get burned!
Even some of the larger funds out there can run into trouble when they are speculating
on a trend reversal, and that’s certainly happened a lot in the past few years.
I know a number of my hedge fund colleagues were completely wiped out due to margin calls in the Covid-19 market crash in 2020.
And I know many professional money managers that got burned when the Fed started raising rates in 2022.
Let me show you an example…
This is a daily chart of Tesla, one of the hottest stocks in the market last year. You'll
notice I've got the RSI indicator plotted at the bottom of the chart.