STOCK TRADING STYLES, STOCK TRADING APPROACHES, COMMODITY FOREX TRADING STYLES, COMMODITY FOREX TRADING APPROACHES...
Below are 2 different
and diverse approaches to trading. These are not system but approaches.
1. JUMP AND TRADE APPROACH:
The basic feature is not
to wait for sl when the line is going against you and many times not to wait
for tgt when the line is going in favor of you.
Here the market is very
volatile. There are bigger opportunities to grab and to miss. The markets are
many given break out or it is trading at further support or resistance after
giving the initial breakout with bit moves.
There are usually also
many news factors and new pressure is also higher. There are multiple news
factors from domestic and international levels.
In this approach ultra
alertness is required.
Apparently higher
churning and turnover takes place.
Losses are mostly
limited so in that sense it is very good approach to keep the losses short.
It doesn't mean that you
do not average on the winning side and not extend your target if you feel so.
There is good chance of
missing profits due to premature exits.
2. SL AND TARGET APPROACH:
This is a standard and
systemic approach.
You have made a system
of risk management, risk reward ratios are predetermined by you and you
strictly follow it in most or all trades.
You stick to SL even if
you are long and there are all chances of hell breaking loose. At the same time
you remain in position till the target is achieved even if it is taking time
for any of them to occur.
When market has
reasonable movement then even 2-3 trades can fetch good profit due to wait till
the target and absence of premature exit.
Review of system is more
possible and practical at the end of duration in this approach.
This system is cool and
calm, does not require ultra alertness, you can place limits and relax for
days.
This is particularly
effective approach when markets are moving from one end of the range to another
or when market are slow but in trendy or untrendy but consolidating with room
for individual stock movement in individual sectors.
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