MKJ Creeping Strategy is a long-term strategy that will help you find the best price for a stock over time. When you follow this consistently in the long-term, your portfolio will have stable stocks of good companies that you’ve purchased at their low points. Therefore, it will strengthen your portfolio and give a bigger cushion of profit.
You must have heard the story of The Tortoise and The Hare. In the story, although the tortoise is slow because he has to crawl and can’t run, still he wins against the rabbit. The sole reason for his victory is his consistency and persistence. Similarly, it is very important for an investor to not give up soon, but instead consistently strive to achieve his goal. Remember, you will get there, step by step!
RSI Charts – Relative Strength Index
We will use the RSI charts to apply this strategy. RSI stands for Relative Strength Index and an RSI chart plots the relative losses and gains in a stock’s price over a period of time (generally 14 days) on a scale of 0 to 100. In other words, an RSI chart represents whether a stock has been oversold or overbought in the market. An investor should sell his holding when the stock has been overbought (it represents that the stock is at one of its strong points); and should buy units when a stock has been oversold (it represents that the stock is at its weaker points). An RSI below 30 is considered low i.e., oversold; and an RSI of over 70 is considered high i.e., overbought. To know more on RSI charts, you can watch MKJ sir’s video here.
Now, let’s understand the MKJ Creeping Strategy
Our basic objective in the creeping strategy is to buy the shares at low prices and hold them for the long-term. It is important to remember this objective because many investors get too excited in a bullish run; they miss their goal and end up buying at higher prices.
To buy the shares at low prices, our first step is to look at 1-week RSI chart of different stocks; and find the stock which has a low 1-week RSI. This means that the stock is hovering around its lower range from a long-run perspective.
Once you’ve identified the stock that you’re interested in after looking at the 1-week RSI charts; the second step is to target that stock and consistently track its 1-day RSI charts for the coming days. If the 1-day RSI is high, then don’t worry – just be patient and wait; let it fall further. When you feel that the 1-day RSI is also low on a specific day; then make the decision that it is the day you’re going to buy that stock. But, wait.
On the day that you’ve decided to buy the stock, the third and final step is to keep tracking the 15-minute and 5-minute candles of the stock. As soon as you see that the stock price is on a lower range in the candle charts, buy the stock at that instant.
MKJ Creeping Strategy works at 3 levels. First, you’re choosing a stock based on the 1-week prices and seeing which share is generally trading at lower bands; from a long-term perspective. Next, you target that share price and track its 1-day charts to catch the stock at its lowest point. Furthermore, you wait for the stock price to fall further on that day to get it at its best price possible. Therefore, since we’re filtering the stock at 3 different levels, we will definitely get the stock at its lowest price.
One important point to note is that you have to choose a good long-term stock. Do not fall for volatile small stocks which are not sure to give returns in the long-run. Instead, look for stable companies in which you have confidence and are certain that they will not go bust in the long-term.
The aim of this strategy is to find the weakest point of a good long-term stock and buy it at that point. Alternatively, you can say hit when the iron is hot. Every stock goes through various phases in the market and faces a low point. We are just aiming to plot that low point and buy the stock. Just like an Eagle, we will keep tracking the share price with patience, without letting our emotions affect us. As soon as we find a good opportunity, we will pounce and instantly buy the stock.
You can watch MKJ sir’s video on this topic here!
Hope you found this article useful. Please let me know your thoughts in the comments below!
Read our other blog posts here!