Trading Strategy Articles –
There are times when the market is in such a strong trend that even Stevie Wonder could see which direction to trade. Currently, however, the markets area is acting like a conundrum wrapped in a riddle.
Your current trading strategy blows; it’s time to search for a new one. That’s what a lot of traders think when they are not seeing consistently profitable results. What you probably don’t realize is that you have all the tools; it’s just a matter of fine tuning.
What if someone told you it was possible to capture the lion’s share of Dow gains by only being invested and at risk in the market for a little more than half the time?
Trading for a living requires steady returns. Equally important, and often overlooked, is that you must avoid big losses to stay in the game. Gains and losses are asymmetric and the math is well known – a 10% loss requires an 11% gain to break even; a 20% loss will need gains of 25% to fully recover.
Many books and articles have been written about how to use moving averages and a variety of technical indicators to trade the markets. Amazingly, very few of these books or articles show actual test results.