Ask the majority NEW tradesmen, and they will say to you about a certain moving average or combination of the indicators or a model of diagram which they employ. It is, like the tradesman more experienced knows, an entrance point and not a strategy.
Very tradesman who is a will more tested to say a strategy should also include the management of fortunes, the ordering of risk, perhaps the stop losses and naturally, an exit point. They could also say that you must let your benefit run and cut your losses soon. A tradesman well-read will also say you that your strategy should equip with your commercial personality.
BUT there is another essential ingredient of many tradesmen forget - and of whom is to entirely include/understand personality what you trade. Some tradesmen specialize say inside, the gold or the crude of Brent or the currencies or them could specialize in a particular index such as the FTSE 100 or Dow but much of tradesmen chooses to trade of the shares. Indeed some tradesmen splash in a little all. I think that it is the sector which ruins or not to reach at least many tradesmen their full capacity.
In my sight: You absolutely MUST specialize.
I am sure that on surface the majority of the people would say that seems sensitive but here why it is a NEED!
Superficially, much of diagrams look at the same thing. I bet if you had not seen the diagrams during some time and somebody where to show you a crude diagram of Brent more than 6 months and then a diagram of PLC of Barclays during same the 6 months when you would be hard thorough to say what was which purely on the glance of the diagram.
However, I bet that if you find a tradesman who trades ONLY during the day of Barclays inside and during the day outside and also find somebody who trades ONLY the rough day of Brent inside and during the day outside, both would identify easily which was which. WHY?
Since each share, index or product have it is to have personality .
Some will be intrajournaliers volatile, some will follow their sector or the principal index (disciples of the market), some will make their own thing, some will nail in top and in bottom regularly, the others will stop with moving average principal and the others will plow just through. Some will move of 5% on average before they recall and some of 2%. Some will notch to the top or to the bottom regularly, some not. You have the idea!
Consequently, anyhow good you are to analyze indicators, moving average, tendencies and models, the same strategy will not function for all. I would go as much as saying that a strategy which functions well for self-directional Bovis, for example, is likely not to function for the group of BT - they have very different personalities .
Leave-thus us return to our question: What makes a good commercial strategy? Let answer me with a series of ten questions which you must find of the answers to, in order to establish a REALLY GOOD strategy.
What do you want to trade (share, index, produced, currency, etc)? If your answer is shares I (plural) would invite you to select a typical share at this stage to really specialize. You can add later.
1.What personality makes these share, index etc have?
is the system of the entry
2.What most reliable for this share?
is the system of stop loss
3.What most effective for this share?
4.What average your personality the trade (attitude to be risked, losses, discipline, how much you worry etc) and you east can trade this strategy without exceeding it?
Which calendar do you want to trade? (Using intrajournalier or end of the data of day)
How much data do you maintain above the assistance last of the trade identify you weaknesses of strategy?
Once you have an answer to each question you must make a final thing. You ensure all these things adapted together and supplement you. For example, if the ideal position of stop loss represents a great average risk and is in conflict with your own attitude to risk, you must begin again. If you will exceed your exit point because avarice makes you the blow for more inside, you must still think. Perhaps you should not trade that actions initially - seek one with different a personality which will lead to a strategy that you can trade comfortably.
It is a length and sometimes painful iterative voyage. You could have to go round and round in always decreasing circles above a long time. Test and refining, test and refining before you can really have a reliable strategy and that one can repeat who REALLY FUNCTIONS for you.
THEN, you can seek other things to trade which have the same thing personality as your actions, index, product or currency of specialist.
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