Day trading strategies: the complete guide with all the advanced tactics for stock and options trading strategies. Find here the tools you will need to invest in the forex market
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BOOKS.YOSSR.COM-DAY-TRADING
Technical System
Here’s where you describe your technical trade entry system along with the exit strategy. I haven’t covered a lot with regard to exit strategy because the exit or take-profit level depends on your hit rate. When designing your strategy, evaluate the most common payout it gives you. See if it makes money for you with its hit rate. More advanced traders will include things like position sizing upon exit and such things. As a beginner, don’t bother with partial exits. It’ll only complicate your payout ratio calculations. Build and establish a good base, and you’ll figure out whether you need partial exits or not. A general rule of thumb is to aim for a payout ratio of 2. Anything below this requires a high hit rate, which very few systems provide. When exploring your system, remember that you can increase the hit rate by reducing the payout. You can play around with this to see if this makes the system more profitable for you. Events The markets have a bunch of external events that affect them, such as earnings announcements, dividends, splits, interest rate announcements, press conferences, and on and on. Generally speaking, you need to pay attention to the following events: earnings special events pertaining to the individual stock or political events like elections interest rate announcements nonfarm payrolls (NFP) That’s it. These events are always scheduled in advance, and as a beginner, stop trading an hour prior to the announcement and resume an hour after it has passed. The reason is that volatility jumps like crazy, and your stops will get triggered. If you have any positions open that are close to profit, take a lower profit just before the announcement, as long as it doesn’t affect your risk numbers too much. Similarly, if you have a trade that is in a loss and is near its stop- loss, you have to close the trade out just before the event. If your trade is in the middle of the road or is even break even, ride the event out and hope for the best. Some stocks are better than others in this regard. Stay away from flashy companies run by Twitter-wielding CEOs who tend to send their products into space instead of building profits. You know who I’m talking about. Aside from being annoying, you can bet there will be a number of algorithms and bots tracking every character such people type into Twitter, and all it takes for a flash tumble to occur in the stock is a typo or a rash tweet. Stick to boring names no one has heard of, and you’ll be much better off, no matter how much you love or hate the company. Download 1.65 Mb. Do'stlaringiz bilan baham: |
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