Hi there! Coach JR here with a new coaching video to help you become a better, more confident trader.
Today, I’m teaching you about two concepts:
And to illustrate these 2 concepts, I’ll use Tesla.
Now, Tesla just has some huge news: it might get over $1 billion in government funding to build a battery factory at Gigafactory Berlin.
However, this news isn’t enough, in my opinion, to justify Tesla’s current stock value.
So how do I determine where I think Tesla will go?
That first bullet — Fibonacci retracement. This is a tool all traders should understand, and I explain it briefly in the video above.
Of course, I don’t think Tesla will go up in a straight line. It’ll spike, then fall, then spike, and so on.
That’s because of price rotation. Price rotation happens when the big guys move their capital in and out of assets, sectors, or asset classes.
This freaks out the average retail trader. These traders think that a decent drop is the end of Tesla, but it’s just massive amounts of capital being withdrawn from the stock.
But the smart traders know that hanging on could be the best idea. In fact, they may strategically take profits and add to their position if they’re good enough.
Watch the video above for this full coaching lesson…