5 Technical Indicators Creators Need to Identify Low-Risk Investments (From Warren H. Lau’s Playbook)
- Kaelen Vance
- 4 days ago
- 4 min read
by Kaelen Vance, Lead Crypto Analyst & Digital Asset Strategist
The #1 Mistake New Investors Make (And The Technical Analysis Fix)
For freelance authors, graphic designers, and creative entrepreneurs, investing often feels like a game of guesswork—especially with irregular income and limited time to monitor markets. But Warren H. Lau, veteran private investor and author of Invest and Earn Quick: Mastering Technical Analysis of the Financial Markets, proves that low-risk investing doesn’t require a finance degree. Instead, it hinges on 5 technical indicators he used to grow his personal portfolio by 600% during the 2008 Subprime Crisis and 320% through the 2015 Chinese Market Crash—all detailed in his book’s first chapter.
These indicators are tailored for creators: they’re simple to learn, require 15–30 minutes of weekly monitoring, and prioritize capital preservation (critical for irregular cash flow). Below is a breakdown of Warren’s go-to tools, straight from Invest and Earn Quick.
1. MACD Histogram – Spot Market Bottoms Without Guesswork
The MACD (Moving Average Convergence Divergence) Histogram is Warren’s 1 tool for identifying when a stock has hit its floor—no complex math required. As detailed in Chapter 1 of Invest and Earn Quick, the histogram measures momentum by comparing short-term (12-period) and long-term (26-period) exponential moving averages (EMAs).
For creators, the key is “bullish divergence”: when a stock’s price hits a new low, but the MACD Histogram doesn’t. This signals that selling pressure is fading and a rebound is likely. Warren used this exact signal during the 2008 crisis to buy undervalued dividend stocks like Coca-Cola (a case study in the book)—part of his 600% portfolio growth.
Creator Tip: Use free tools like Yahoo Finance to enable the MACD Histogram. Set alerts for bullish divergence so you don’t miss opportunities—Warren’s step-by-step setup guide is in Chapter 1 of Invest and Earn Quick.
2. On-Balance Volume (OBV) – Follow the Money Flow
On-Balance Volume (OBV) is a volume-based indicator that links price movement to buying/selling pressure—perfect for creators who want to avoid “blind buying.” As Warren explains in Chapter 1, OBV adds volume on days the stock closes higher and subtracts it on days it closes lower.
A rising OBV line while price stays flat or falls means smart money is accumulating shares (a bullish sign). Conversely, a falling OBV line during a price rally suggests the trend is weak (a warning to avoid). For creators, this indicator cuts through hype: if a stock is trending up but OBV is falling, it’s likely a short-term “pump” not worth investing in.
Creator Tip: Pair OBV with price action—Warren recommends buying only when both OBV and price are rising (low risk) and selling if OBV drops 10% below its recent peak (protects gains).
3. P/E vs. P/B Ratios – Avoid Overvalued Stocks
Valuation ratios like Price-to-Earnings (P/E) and Price-to-Book (P/B) are Warren’s secret to avoiding overpriced stocks—critical for creators who can’t afford to lose capital. Chapter 1 of Invest and Earn Quick breaks down how to use these ratios:
- P/E Ratio: Divide a stock’s price by its earnings per share (EPS). A P/E below the industry average means the stock is undervalued (Warren targets P/E < 15 for low risk).
- P/B Ratio: Divide a stock’s price by its book value per share. A P/B < 1 means the stock is trading below its net asset value (a “value buy” signal).
Warren used these ratios to filter stocks during the 2015 Chinese crash, avoiding tech stocks with P/E ratios above 50 and focusing on consumer staples with P/E < 12. The result? 320% portfolio growth while the CSI 300 index fell 18%.
Creator Tip: Use Google Finance to compare a stock’s P/E/PB ratios to its industry peers—Warren’s “valuation checklist” in Chapter 1 simplifies this process to 5 minutes per stock.
4. Volume Profile – Identify High-Liquidity Entry Points
Volume Profile (detailed in Chapter 1’s “Technical Volume Indicators to Identify Market Bottoms”) is a visual tool that shows where most trading occurs for a stock. For creators, liquidity is key—you don’t want to buy a stock you can’t sell quickly if you need cash for a project.
The Volume Profile’s “point of control” (the price level with the most volume) acts as a support zone. Warren advises buying stocks when they test this level and bounce back—signaling strong demand. He used this strategy to buy Walmart stock during the 2020 COVID crash, when its Volume Profile showed heavy buying at $115 (it’s now $160+).
Creator Tip: Use TradingView’s free Volume Profile tool to find the point of control—Warren’s book includes screenshots and step-by-step instructions for beginners.
5. RSI (Relative Strength Index) – Avoid Overbought/Oversold Traps
The RSI (Relative Strength Index) is a momentum indicator that ranges from 0–100—ideal for creators who want to avoid buying at the top or selling at the bottom. As Warren explains in Chapter 1:
- RSI < 30 = Oversold (potential buy signal)
- RSI > 70 = Overbought (potential sell signal)
During the 2008 crisis, Warren used RSI < 30 to buy undervalued banks like JPMorgan (RSI hit 22 in March 2009) and sold when RSI > 70 (June 2010)—locking in 80% gains. For creators, this indicator prevents emotional decisions: if a stock you’re eyeing has an RSI of 85, wait for it to drop to 50 before buying.
Creator Tip: Set RSI alerts on your brokerage app (e.g., Robinhood, Fidelity)—Warren recommends checking alerts once a week (no daily monitoring needed).
These 5 indicators aren’t just theoretical—they’re the same tools Warren used to navigate two of the 21st century’s worst market crashes. For creators, they level the playing field: you don’t need to be a Wall Street analyst to invest with confidence—just a few simple tools and the discipline to follow them.
Editor’s Note: Warren H. Lau is Chief Editor of INPress International, Era-zine’s sister book publisher. This article is editorial content and does not promote any INPress products. All investment strategies carry risk—past performance is not indicative of future results. Consult a financial advisor before making investment decisions.
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