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.
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.
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
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.
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
Once the goals have been set and preferred style
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
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
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
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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