We have had an influx of members asking about the "620 strategy." As the person who first devised it, let me say that everyone is getting a bit carried away with their perception that this is some magical system. It is not. I first started using a five-minute intraday chart with 6-period and 20-period exponential moving-averages and a MACD set to (6,20,9,C) to trade foreign currencies. After a while, I began to notice that I could use it time entries and exits in short-sale positions at points of logical resistance or support that I could see on the DAILY chart. It is nothing more than a tool that I use, and will not get you out of existing positions on a day-to-day basis. I only use it to time entries and exits on stocks INTRADAY. Another way I use it is to watch for reversals in the major market indexes and then use it to time entries and exits in leveraged, inverse ETFs. I have discussed all of this repeatedly in our live webinars, and it remains a bonus feature, if you will, of what webinar subscribers receive with this additional service.
I'm not sure why everyone seems to think this is a "strategy" or a trading "system," because it is not. It is a tool, and it is subject to numerous contextual factors such as what is on with the general market or the individual stock/ETF in question and their positions within the broader context of their daily and, occasionally, weekly charts. One could likely just as easily use a different chart set-up, say a 15-minute intraday chart with 9-period and 27-period exponential moving averages or whatever else they may devise that works for them. It's really a matter of learning to use it as an intraday timing tool, not a system.
It seems that some have latched onto the 620-chart as some mechanical system or strategy, which it is most definitely is not. It is a tool that one can become familiar with using through their own experience, nothing more, nothing less. So I am herewith putting an end to this perception, which is patently false. All I know is that if you are still long stocks and have been for the past 2-3 weeks, it isn't going to save you now.
Gil Morales
Market Lab Report - 620 Chart Notes from Gil
| Published: | 16 Mar 2020 08:49 ET |
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