Trading Systems
I make trading with warrants, although also I like the options and futures on stocks. Whether you dedicate simple stocks, Forex, commodities, or futures, basically two trading families of systems exist . There are plenty of systems but they all can include themselves in these two groups:
1. Trend tracking systems
2. Systems for volatility or discretionals
At the end trading is a game of odds and doing that odds be of your side is what converts to trading in a business, (very lucrative sometimes). According to your personality you will prefer systems of group 1 or of group 2.
1.- Trend tracking systems : A typical example is to buy and to sell when the price crosses over the moving average. This system works well, except when the share moves in a lateral channel or directionless. This system has a % Hits < % Failures, then, to make money you have to cut rapidly losses and allow to run the profits. That is, you will have many little losses and a few big profits, that they will compensate it and they will do profitable the system. Another characteristic of these systems is that are more indicated for the investment to halfway and long term and does not for the short term or day trading. Advantages of these trading systems: They are easily followed, the buy and sell signals are detected clearly.
Disadvantages: You must claim cold the head not to discourage you when your have a burst of several consecutive losses and having will enough to go out as soon as possible of loss, and go on with a profit without sell prematurely. But this depends on the style of each one. what style do you like?
A time was wherein I was doing my stock exchange transactions with a trend tracking system , until I saw that I was not having enough patience, that I was wanting to do shorter operations, of two, three or four days of duration. As soon as now I invest to very short term and with discretional systems,. . . But this I will tell it another day.
1. Trend tracking systems
2. Systems for volatility or discretionals
At the end trading is a game of odds and doing that odds be of your side is what converts to trading in a business, (very lucrative sometimes). According to your personality you will prefer systems of group 1 or of group 2.
1.- Trend tracking systems : A typical example is to buy and to sell when the price crosses over the moving average. This system works well, except when the share moves in a lateral channel or directionless. This system has a % Hits < % Failures, then, to make money you have to cut rapidly losses and allow to run the profits. That is, you will have many little losses and a few big profits, that they will compensate it and they will do profitable the system. Another characteristic of these systems is that are more indicated for the investment to halfway and long term and does not for the short term or day trading. Advantages of these trading systems: They are easily followed, the buy and sell signals are detected clearly.
Disadvantages: You must claim cold the head not to discourage you when your have a burst of several consecutive losses and having will enough to go out as soon as possible of loss, and go on with a profit without sell prematurely. But this depends on the style of each one. what style do you like?
A time was wherein I was doing my stock exchange transactions with a trend tracking system , until I saw that I was not having enough patience, that I was wanting to do shorter operations, of two, three or four days of duration. As soon as now I invest to very short term and with discretional systems,. . . But this I will tell it another day.
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