bottom determined. You will then simply buy or sell based on not where the
security is currently going, but where it is likely
to go once it rounds the
pivot point and starts back the other way.
Essentially, you are going to look at these charts and try to figure out where
the lowest and the highest points are. When the stock gets to the lowest
point, it is time to enter the market and purchase the stock at a lower price,
hopefully, lower than market value. You will then hold onto the stock for a
bit, waiting for it to reach the high point on the chart, or at least higher than
where you started so that you can make a profit when it’s time to sell.
Pairs trading
As
the name implies, pairs trading is a strategy wherein you choose a
general category of stocks, tech stocks, for example, and then go short on
one stock in the sector while going long on the other. Making these trades at
the same time will bolster your odds of ensuring one of them actually turns
a profit while also ensuring that you are able to turn a profit regardless of
the conditions in the market. You will also be able to see movement on all
sides more easily including sideways movement, downtrends, and uptrends
and then bet on a few different options within the market. Since you are
betting on both sides, you are more likely to make some money compared
to just picking one kind of stock.
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