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RE: Stage Analysis Beginners Questions - isatrader - 2025-10-11
It depends whether you are a position trader, swing trader, or a longer-term investor. As the timeframe that you trade greatly affects the length of pullback that you might be willing to endure. So there's not a single answer and numerous approaches to it.
These days Stan is much more aggressive, talking about exiting positons either partially or fully once they start trading below their 50 day MAs. Whereas back when the book was written in 1988 the market moves unfolded over longer periods, so the book talked about raising stops gradually below the 30 week MA as the Stage 2 progressed. But that requires sitting through some huge pullbacks, as price can often get very extended from the 30 week MA, and it might have a 30%+ pullback, and still be in Stage 2. So these days mixed approaches are necessary to hold through long Stage 2 advances and the significant pullbacks, by talking partial profits into strength (i.e. sell some on failed continuation breakout to new highs), or if it has a quick run and gets very extended from the various MAs, or some if it starts trading below the 50 day MA etc. So you can hold through the pullbacks and add back in areas of support, or rebounds etc.
Its a difficult skill. I have a recommended reading list for the method and more advanced techniques in the learn section of the site.
These books will give you a good understanding of the Stage Analysis method and related topics:
Top 5 Books To Learn Stan Weinstein’s Stage Analysis Method
The Wyckoff books will help you get a deeper understanding of price and volume and base structure (tape reading techniques):
Top 5 Books To Learn the Wyckoff Method
(2025-10-11, 02:11 AM)Wheeler Wrote: Hello David, I have a question regarding selling a stock while it is still in Stage 2 but the weekly close dropped below the 10 week moving average? Would you consider selling or selling some of the shares if the closing weekly price drops 5% below the 10 week moving average even though the stock is still in Stage 2? I have read some articles where it was said to sell when the price drops 2% the 10 week moving average. This seems kind of tight to me.
OR, would you wait until the stock moves into Stage 3? If you do suggest waiting until Stage 3, at what percent would you consider selling your shares when the close is under the 10 week moving average.
I am looking for the best exit price before a possible Stage 4 begins
Thanks