How to Use the Phoenix Finder
2022-05-12 | Danielle Shay
Stock traders who can find high-quality stocks do so with indicators. An indicator will simply read the stock’s technical and analytical information provided by the trader and determine how that particular stock will perform in the future. Of course, some indicators are better than others as there are two types of indicators traders can use free and premium.
In this article, we are going to go over the Phoenix Finder. The Phoenix Finder is a premium indicator designed for traders to find the best stocks where traders can get in before everyone else does. But, as a trader, you know it’s a lot easier said than done, and a lot of times, it comes down to more art than science. But I want to get into why you should be using this tool, and if you have decided to use it, are you doing it effectively? Regardless of how powerful or savvy a tool is, it doesn’t matter how great it is if not utilized correctly. I want to ensure the Phoenix Finder will work for you because, in times of severe volatility within the market, that is simply something we, as traders, cannot afford.
Is the Phoenix Finder Right for You?
The Phoenix Finder is a versatile indicator that can assist any trader at any level in their trading career. If you are looking for an indicator that can help you see which stocks are ready for a rally or ones ready to fall, consider getting my Workspace Bundle, which includes the Phoenix Finder and other indicators that can assist you in the market.
Video Guide Trading With the Phoenix Finder
What is the Phoenix Finder?
We should all be familiar with the legendary creature known as the Phoenix, its mythological icon that symbolizes renewal and rebirth by rising from the ashes of its demise. But what exactly is the Phoenix Indicator? The Phoenix Finder is built to make it easier for traders to find quality stocks by comparing them. It can also identify market trends and where the market is shifting so traders can decide on the best entry and exit points.
For example, the stock market may get a piece of news that it did not like and will send stocks lower, leaving traders scrambling to make moves. However, as stocks fall during that chaotic selling session, you will want to look for the Phoenix. When stocks meet their demise, traders will want to find the stocks poised to rise from their ashes. And that is where the Phoenix Finder indicator comes into play to help traders find these stocks that have taken a beating in the market but are ready to see new gains.
Initially, when I created the tool, my goal was to identify the strongest stock rising off of the lows so I could jump on that ticker first. However, traders often ask me, “What about when strong stocks start to roll over? Or, even better, can I use it to identify weak stocks rolling over, to trade them to the downside? The Phoenix does it all! But I don’t call these weak stocks Phoenix; I call them Canaries in the coal mine. Why? Canaries were used in coal mines to warn miners in case of dangerous gases; the canaries would react first, signaling to the miners it was time to get out. While the Phoenix tool identifies strong, rising stocks, it also identifies weak stocks that fall first – like canaries in the coal mine. This means that traders can use the tool both to the upside and the downside!
How to find the Phoenix?
My criteria for researching individual stocks have always been coupled with technical and fundamental analysis, but what I try to do as a trader is to compare the trend’s strength across charts. Doing that tedious research on tons of stocks made things time-consuming and difficult. So I needed a tool to do all of this in one place when conducting my research, then came the idea of the Phoenix Finder indicator. But, every incredible journey to financial freedom must have a starting point. And starting what I call a Phoenix Folio, which is also known as a stock portfolio of your most anticipated stocks, is a great start.
How I pick stocks:
- Observe the overall market
- Find which index has the most strength and weakness
- Review larger sectors and industry groups
- Narrow your focus to specific industries and sectors based on money flow
- Plug into the Phoenix Finder and find the best entry points
The categories of stocks that are in my Phoenix Folio change over time, especially as sector rotation hits. Sometimes one group will be my area of focus for several months, and then I’ll shift to a different list, as money flows into another area.
Here are a few examples of Phoenix Folios:
- Current watchlist – This is the watchlist that I have researched. I plug into the Phoenix finder, and it tells me when I should jump on trades when they trigger.
- Grandma loves it- This list is composed of household stock names like Amazon, Home Depot, and Nike. These stocks are market leaders, and if they move in one direction, the market tends to follow.
- Big picture – This is the overall market view in one shot, and what you want to understand is if the market is healthy or not. It should tell you what the indexes, key sectors, and correlated stocks are doing in a time frame.
- Millennials – New generations will shift the market based on their likes and dislikes. For instance, Millennials spend money on entertainment, online shopping, travel, coffee, used vehicles, etc. It’s essential as traders to keep track of the new generations on what they do with their money because that creates new opportunities.
- Phoenix flyers – These are hot topics stocks that can exponentially grow.
Using the Phoenix Finder
After I have conducted my research, I plug my watch list into the Phoenix Finder, and at the bottom of the chart, you should see the results of the strength and the weakness of the stocks. Stocks go up and down throughout the day. When stocks are down, traders will see that the stock will be in red. If the stock is healthy or poised to break out of its slump, it will be marked green.
There are two distinct trading setups that I use with the Phoenix Finder, and those are Pullbacks and Trend continuations:
This is a reversal strategy in which I look to identify the strongest and weakest tickers in the bunch; as they begin to pull back, I either trade to the downside or use it as a gauge for the overall market and what it’s doing.
You can see in the chart above that the market trend was overall healthy, and then it had a slight pullback. The indicator caught the pullback and began to generate red in the areas that it was affected. Trading with the Phoenix Indicator tells you when a pullback is complete and when the best opportunity to buy stocks is, which will be indicated in green.
How to Identify a Pullback?
We can talk about pullbacks within the market all day, but when it comes to it in real-time, traders need to identify what it looks like. Traders can identify pullbacks by looking at the big picture in a larger time frame and decipher when there’s an actual pullback or if the market is correcting on a deeper level. That is what the Phoenix Finder will tell you. Traders can find these pullbacks by comparing different sectors and industries to know when the pullback is happening. Below, you can see the major indexes in red and green. The indexes in yellow are gearing to transition to either green or red.
The Phoenix Finder can also be used in a downtrend. When the market rallies, traders can use it to identify the weakest links, and short those areas as the Phoenix Finder signals that the move is headed back lower. Traders can use the Finder to identify triggers and trend shifts to get short. If and when the trend starts shifting back up to the upside, Phoenix will also light the way.
My go-to strategy when using the Phoenix Finder is technical-based, called the five-star phoenix strategy. When using the strategy, traders will want to look for solid trending stocks, and when they pull back and dip, we want to catch the rise. Below you can see a five-star setup utilizing the Phoenix finder and the Squeeze.
The chart above has a general upward trend, and with every dip, it rises just like a phoenix. You can see that it rallies for a bit, then it will pull back. So long as the broader market is healthy and the sector it’s in is doing well, the chances of this stock rising again will be good; however, in the example, you can see it did just that, it rose from its demise, like a Phoenix. Furthermore, the Phoenix Finder works great with other indicators such as the TTM-Squeeze, coupling it with other indicators only strengthens your trading opportunity within the market.
Ways to Trade with the Phoenix Finder
There are several ways to trade with the Phoenix finder. It’s a versatile indicator that can work with many strategies, such as day trading and swing trading. It can also work well with other indicators such as the squeeze, Fibonacci, and fundamental analysis.
Another value this indicator does for traders is that it allows them to trade stocks, options, and ETFs. It’s always a good idea to diversify your trading portfolio to capitalize on market trends, so you don’t get stuck trading only one type of security. However, aside from its various uses, it’s a solid indicator for any trader. Regardless if you are new to trading or an expert, this indicator will give you an edge and help you find the best trades at the best time. Traders will have to provide the indicator with a starting point, and the indicator will do the rest.
Are you ready to start using the Phoenix Finder?
If you are ready to take the next step by using the Phoenix Finder, I recommend getting my Workspace Bundle. The bundle includes four premium indicators: the Phoenix Finder, Turbo VZO Indicator, VZO Signal, and the TrendStrength Turbo Candles. The package also provides indicator setup, lifetime updates, and tech support, so you can have confidence that you have the most updated indicator set up correctly.
FAQs on the Phoenix Finder
Q: Can you load your own stock list into the Phoenix Finder?
A: Yes you can, it’s one of the best parts about the indicator, you can update it on a daily and weekly bases and it works on TradeSations or thinkorswim platforms.
Q: Can I use the Phoenix Finder for Forex?
A: Yes, you can, but you need to compare products that are trading at the same trading hours in order for the indicator to function correctly.
Q: What are Fibonacci retracements?
A: Fibonacci retracements are trading indicators derived but from the relationship between the numbers in the sequence themselves.
Q: How do you develop a trading psychology?
A: Some of the tips to master trading psychology are: find a strategy you like and stick to it, find a good trading community, set your performance goals in years, not months or weeks, and find a mentor that you can trust and follow.
Q: Which time frame is best for swing trading?
A: There is no one best time frame, but generally the time frames for swing trading are longer than the ones for day trading. Swing traders typically look at hourly charts and above, including daily and weekly charts.