Episode
4 Steps to Avoid Buying a Stock Too Early — Using AMD
- Published
- Sep 22, 2026
- Duration seconds
- 850
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Summary
AMD is up nearly 10%, but the biggest lesson here isn't about AMD. It's about why buying a stock while it's falling can be one of the most expensive mistakes a trader makes. “Buy low and sell high” sounds simple until you have to decide where low actually is. When a stock is falling, you don't know whether today's dip is the bottom or whether another 10%, 20%, or 30% decline is coming. AMD provides a perfect example of why trying to catch the exact bottom can create unnecessary risk. Instead of trying to predict the bottom, the goal is to find evidence that buyers are actually taking control. The 10 EMA, 20 EMA, and 50 EMA Trend Template provides one way to identify that change in direction. When the 10 EMA moves above the 20 EMA and price moves above the 50 EMA, the trend is mathematically bullish. It doesn't predict how long the move will last or how far it will go, but it identifies the current direction. Then comes one of the most important concepts in the process: exhausted sellers . Order blocks can identify areas of potential support and resistance on the chart. They can also reveal where previous buyers may still be trapped. When a stock rallies back into an overhead order block, those buyers may finally have an opportunity to exit at breakeven, creating additional selling pressure. That's why buying a stock underneath major resistance can be very different from buying after that resistance has been cleared. Once the sellers have been absorbed and buyers push through the congestion zone, the stock can have much more room to run. AMD also provides a great example of how multiple signals can stack together. The stock developed a bullish Trend Template, received a bullish Momentum Alert, and saw improving Fear & Greed. At the same time, the technology sector w…