Most losses come from buying at the wrong time, not picking the wrong stock.
Stan Weinstein's four-stage cycle is one of the cleanest frameworks for timing entries:
• Stage 1: Basing — stock moves sideways, consolidates, builds energy
• Stage 2: Advancing — price breaks out and trends up. Early Stage 2 is where you want to be positioned
• Stage 3: Topping — distribution phase. Often when headlines are most bullish and retail piles in
• Stage 4: Declining — downtrend. No reason to be long here
The trap? Chasing names in Stage 3 because they finally made the news. By then, smart money is already rotating out.
Buy early Stage 2. Avoid Stage 4 entirely. Simple rule, hard to follow when FOMO kicks in.
Stan Weinstein's four-stage cycle is one of the cleanest frameworks for timing entries:
• Stage 1: Basing — stock moves sideways, consolidates, builds energy
• Stage 2: Advancing — price breaks out and trends up. Early Stage 2 is where you want to be positioned
• Stage 3: Topping — distribution phase. Often when headlines are most bullish and retail piles in
• Stage 4: Declining — downtrend. No reason to be long here
The trap? Chasing names in Stage 3 because they finally made the news. By then, smart money is already rotating out.
Buy early Stage 2. Avoid Stage 4 entirely. Simple rule, hard to follow when FOMO kicks in.