There had been a time of W.D. Gann, Livermore when trading was done on the floor. Now computers have altered the game altogether. Process which traders used manually for generating buy/sell signals may now be fed into the computer, and computers may today exchange on trader’s behalf.
In such a wild jungle, to have the share of yours of your benefit (food), you’ve to be quite disciplined. You will need to have a proper game plan. Because in a jungle, everybody survives whether it is Lion, Elephant, Wolf, Hyena, Tiger, Deer etc.
Lion, Tiger collect the prey, as well as after having their food, go out of the remaining for Hyenas, Wolves.
Just before catching the prey they wait for the right moment. They view the least active of all the, and once that’s identified, they keep on chasing it, until it results in up. players which are Large in the markets after making their earnings, leave the inventory See for yourself, simply click the up coming post, weaker traders which resemble Hyenas, Wolves. Weaker traders won’t ever have insider information to make sure they cant hunt, so they have to wait and observe what players which are big energy are doing, and must follow them to eat the leftovers of theirs.
Same goes with trading too, you have to determine a weak stock. This particular identification requires some time. As there are number of stocks present in the industry, thus you’ve to first recognize them, then out of them, you’ve to determine further weaker ones. And then at just the right time, assault them. This attacking means entering a trade which can be BUYING / SELLING. This BUYING prospect can be recognized as the stock which has dropped considerably and now trading with really a reduced amount of volume. And a SELLING candidate could be identified as the stock that has risen considerably and now trading with very high volume.
One other analogy and that works perfectly in this case is of a CHESS GAME. The more time a player gets to choose the move of his, the better walk it gets. And so, likelihood of success increases also. Just before coming up with a move, player can make a broad strategy, then out of possible movements, makes his best move.
If exact same logic can be utilized in trading too, this could do wonders. Before entering a reckless trade, if a trader makes a game plan based on his capital, risk appetite, gain expectation, he can never loose his capital and go bankrupt.
For instance, HEDGE FUNDS make use of a strategy of EVENT based trading in that they wait for a future event before entering a trade. INVESTORS hold on for a sharp dip in the markets prior to buying. And until then they both wait & wait preserving their capital.