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Posted by xin xiu24 on 2. Aug 2016

Before investing or trading Cool Base

Jake Peavy Jersey , it is important to develop a strategy or game

plan that is consistent with your goals and style. The ultimate goal is to make

money (win), but there are many different methods to go about it.



As with

many aspects of trading, many sports offer a good analogy. A football team with

goals geared towards ball control and low-scoring games might adapt a

conservative style that focuses on the run. Teams that want to score often and

score quickly are more likely to pursue an aggressive style geared towards

passing. Teams are usually aware of their goal and style before they develop a

game plan. Investors and traders can also benefit by keeping in mind their goals

and style when developing a strategy.



Goals



First and foremost are

goals. The first set of questions regarding goals should center on risk and

return. One cannot consider return without weighing risk. It is akin to counting

your chickens before they are hatched. Risk and return are highly correlated.

The higher the potential return, the higher the potential risk. At one end of

the spectrum are US Treasury bonds, which offer the lowest risk (so-called risk

free rate) and a guaranteed return.



For stocks, the highest potential

returns (and risk) center around growth industries with stock prices that

exhibit high volatility and high price multiples (PE, PriceSales, PriceHope).

The lowest potential returns (and risk) come from stocks in mature industries

with stock prices that exhibit relatively low volatility and low price

multiples.



After your goals have been established Cool Base

Hunter Pence Jersey , it is time to develop or choose a style that

is consistent with achieving those goals. The expected return and desired risk

will affect your trading or investing style. If your goal is income and safety,

buying or selling at extreme levels (overboughtoversold) is an unlikely style.

If your goals center on quick profits, high returns and high risk, then bottom

picking strategies and gap trading may be your style.



Style



Styles range from aggressive day traders looking to scalp 14-12 point

gains to investors looking to capitalize on long-term macro economic trends. In

between, there are a whole host of possible combinations including swing

traders, position traders, aggressive growth investors, value investors and

contrarians. Swing traders might look for 1-5 day trades Cool

Base Gregor Blanco Jersey , position traders for 1-8 week trades

and value investors for 1-2 year trades.



Not only will your style depend

on your goals, but also on your level of commitment. Day traders are likely to

pursue an aggressive style with high activity levels. The goals would be focused

on quick trades, small profits and very tight stop-loss levels. Intraday charts

would be used to provide timely entry and exit points. A high level of

commitment, focus and energy would be required.



On the other hand,

position traders are likely to use daily end-of-day charts and pursue 1-8 week

price movements. The goal would be focused on short to intermediate price

movements and the level of commitment, while still substantial, would be less

than a day trader. Make sure your level of commitment jibes with your trading

style. The more trading involved, the higher the level of

commitment.



Once the goals have been set and preferred style

adopted Cool

Base Gaylord Perry Jersey , it is time to develop a strategy. This

strategy would be based on your returnrisk preferences, tradinginvesting style

and commitment level. Because there are many potential trading and investing

strategies, I am going to focus on one hypothetical strategy as an

example.



GOAL: First, the goal would be a 20-30% annual return. This is

quite high and would involve a correspondingly high level of risk. Because of

the associated risk, I would only allot a small percentage (5-10%) of my

portfolio to this strategy. The remaining portion would go towards a more

conservative approach.



STYLE: Although I like to follow the market

throughout the day, I cannot make the commitment to day trading and use of

intraday charts. I would pursue a position trading style and look for 1-8 week

price movements based on end-of-day charts. Indicators will be limited to three

with price action (candlesticks) and chart patterns will carry the most

influence.



Strategy



Part of this style would involve a strict

money management scheme that would limit losses by imposing a stop-loss

immediately after a trade is initiated. An exit strategy must be in place before

the trade is initiated. Should the trade become a winner, the exit strategy

would be revised to lock in gains. The maximum allowed per trade would be 5% of

my total trading capital. If my total portfolio were 300,000 Cool

Base Dave Dravecky Jersey , then I might allocate 21,000 (7%) to

the trading portfolio. Of this 21,000, the maximum allowed per trade would be

1050 (21,000 * 5%).



STRATEGY: The trading strategy is to go long stocks

that are near support levels and short stocks near resistance levels. To

maintain prudence, I would only seek long positions in stocks with weekly

(long-term) bull trends and short positions in stocks with weekly (long-term)

bear trends. In addition, I would look for stocks that are starting to show

positive (or negative) divergences in key momentum indicators as well as signs

of accumulation (or distribution).



My indicator arsenal would consist of

two momentum indicators (PPO and Slow Stochastic Oscillator) and one volume

indicator (AccumulationDistribution Line). Even though the PPO and the Slow

Stochastic Oscillator are momentum oscillators, one is geared towards the

direction of momentum (PPO) and the other towards identifying overbought and

oversold levels (Slow Stochastic Oscillator). As triggers Cool Base

Buster Posey Jersey , I would use key candlestick patterns, price

reversals and gaps to enter a trade.




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