The Weinstein Method
What is "The Weinstein Method" indicator?
- Presentation of the indicator
The Weinstein Method indicator was developed by us to help traders use the Stan Weinstein Method more effectively. This method usually requires a lot of time and analysis to determine the different phases of an asset, but the indicator takes care of that in no time. By simply choosing the market and the timeframe, traders can get the different trends of the asset, the famous four phases of Stan Weinstein.
- The basic principles of the indicator
The Weinstein Method indicator is based on the principles of the Stan Weinstein Method. According to this method, assets go through four phases: the accumulation phase, the rise phase, the distribution phase and the fall phase. Traders use these phases to determine when to buy, sell or stay out of the market.
- How the indicator works
The indicator will take into account several elements to trigger the phases: the RSI, the volumes, the EMA, the Relative Strength of the asset (the choice of the market in the menu of the indicator is determining for this calculation) and the Supports/Resistances.
Depending on the Timeframe (several configurations: 1 hour, 4 hours, daily, weekly and monthly) and the market (Dow Jones - Stock, S&P 500 - Stock, Nasdaq - Stock, DAX - Stock, CAC 40 - Stock and Cryptos) selected, the variables mentioned above change to adapt to the asset and the timeframe.
Each phase has criteria that must be met in order to be triggered (those described by Stan Weinstein in his book "Secrets for Profiting in Bull and Bear Markets"):
- Phase 1: We have determined as criteria: low volume, RSI in the low zone, minimal price variation over the last X candles and the EMA without direction.
- Phase 2: We calculate the relative strength of the asset compared to its benchmark, above-average volumes, the break of a major resistance, the direction of the EMA and the level of the RSI.
- Phase 3: We look to see if the asset breaks its uptrend (break of a trend following EMA), if it fails to make a new high, if the RSI is in the high zone and if the volumes are strong.
- Phase 4: For this phase to be triggered, the asset must break a major support, be below the EMA (once again these variables are adapted according to the timeframe and the market selected in the menu) and the EMA must be bearish.
How to use
- The signals of the indicator
On the chart, the indicator allows you to visualize the different phases of an asset's movement. Each point on the chart corresponds to a particular phase, which is labeled below the point with the name of the phase. The different phases that can be identified with the help of the indicator are the following:
- S1: Accumulation
- S2: Rising
- S3: Distribution
- S4: Decline
By observing the successive points, it’s possible to identify the market trend and to consider trading positions accordingly.
- The different strategies for using the indicator
The market phase indicator can be used for both short term and long-term trading strategies. However, it should be noted that this method is generally used for the medium and long term.
In terms of trading strategies, investors can use the indicator to identify periods of trend reversal and take positions against the current trend. For example, if the indicator shows a distribution phase, this may indicate a downward trend reversal and a trader could take a sell position when the downward phase begins.
On the other hand, traders can also use the indicator to confirm the current trend and take positions in the direction of the trend. If the indicator shows an upward phase, this may indicate a continuing upward trend and a trader could take a buy position.
Disclaimer
Please note that The Weinstein Method indicator is a tool designed to assist traders in their decision-making process. While it is based on sound principles and can be helpful in identifying market trends, it is important to remember that there is no magic indicator that can guarantee success in trading.
It is the responsibility of the user to carefully consider all available information, including the signals generated by The Weinstein Method indicator, and to make their own informed decisions about when to buy, sell or stay out of the market. It is important to remember that trading carries risks, and no strategy or tool can eliminate those risks entirely.
We want to emphasize that we do not provide investment advice, and any decisions made using The Weinstein Method indicator are the sole responsibility of the user. We cannot be held liable for any losses that may occur as a result of trading using this indicator.