5-Week Wealth Builder Challenge: Week 2
This week, you'll learn how to use moving averages to spot great buying opportunities. No more guessing and hoping for the best.
Hey there,
Welcome to Week 2 of the 5-Week Wealth Builder Challenge!
Last week, you hit a major milestone 🎉, and I’m proud of you! You built a personalized investing roadmap, including your:
Goal (why you’re investing)
Timeline (how long it will take you)
Assets (the investments that will help you succeed)
And best of all? It’s tailored to your life and goals.
That was Phase 1.
Today, we’re entering Phase 2: Using Signals to Improve Your Buying Process.
After today, you’ll never buy a stock just because a friend, a headline, or a talking news head said it was a good idea. You’ll buy because your signal says it is.
By week’s end, you’ll go from: “I buy when someone says it’s a good time,” to “I buy when the market shows me it’s a good time.”
That’s clarity, and it changes everything.
What is a Signal, Anyway?
One thing a signal is not is complicated. In investing, a signal is just proof that it’s a good time to buy or sell a stock. That’s it.
They’re useful because they help you buy and sell confidently based on what the market shows you, rather than guessing and hoping—essentially gambling.
The Buying Signals Professionals Actually Use
A common signal that professionals use to find buying opportunities is called a moving average—specifically, the 50- and 200-day moving averages.
Here’s the basic concept: On a stock chart, a moving average draws a line that represents the average price of a stock over a certain number of days (like 50 or 200 days). And when a stock’s price falls to one of those levels, that’s your signal that it’s a good time to buy.
Traders call this, “buying the dip.” Here’s an example:
Why This Actually Works
Millions of investors watch the 50- and 200-day moving averages, waiting for an opportunity to buy. They represent areas where investors agree on the value of a stock.
So instead of trying to predict the direction of a stock, just let the market show you where everyone is buying. That is a mindset shift from beginner to a savvy investor.
Your Action Step This Week
1. Pull up a chart for your favorite stock or ETF.
2. Add the 50- and 200-day moving averages.
3. Look for the last few times the price touched one of those lines.
4. Notice what happened. Did price bounce, consolidate, or break lower?
If you start seeing patterns, congratulations. You can stop guessing and hoping, and start using signals you trust.
Your Free Investor’s Edge
The trick is to stop trying to outsmart the market and just start listening to it. That simple shift will significantly improve your success moving forward.
In Thursday’s Newsletter
Tomorrow, I’ll show PRO subscribers an advanced signal for stock or options traders.
It’s a signal I personally trade with, and used to make over $10k last week.
Just like moving averages, it’s not a magic trick. However, it will help you spot more buying opportunities before they happen.
I’ll see you then,
✍️ Isaiah from Earn Out Loud
P.S. If you aren’t a PRO subscriber yet, but want to join tomorrow’s lesson, join us by upgrading here: https://earnoutloud.substack.com/subscribe