Trading Strategies - What's Right for You?
It’s the age-old question that so many traders ask themselves and each other: which stock trading strategy should I follow? Does day trading offer better rewards than swing trading? Should I scalp or hold positions? How can I best limit my risk, yet still generate the returns I want?
Like others, I have often wondered whether I should be day trading or swing trading. I have found ways to do both, and each style has its advantages and disadvantages. Ultimately, I think it’s a question traders should continually ask themselves, rather than just once early in their trading careers. Isn’t adaptation the key to successful trading over time?
The adaptive trader is always evaluating current conditions. Always be asking yourself questions. Is the market in an uptrend? Is the market in a downtrend? Is the market trending at all? Are the intraday moves smooth with good volume, or are they narrow, choppy and drifting on light volume? By staying aware of current conditions, a trader is able to determine which trading style will suit him best in the near term, allowing him to limit risk and maximize the rewards of profitable trades.
As you consider the best way for you to trade, be sure to evaluate your own personality traits. By employing a trading style that corresponds with your personality, you are essentially being your own best friend (a cheesy phrase but a necessity for traders). If you’re patient, consider a longer timeframe. Your personality will help you to stay in positions while you wait for the outcome to develop. If you are hyper-active with lots of energy and a short attention span, you may be better of day trading smaller incremental moves on a short term basis. Take stock of your personality when contemplating the best trading strategy for you, and soon you’ll be on the right path toward claiming the profits that have your name on them.
In Part 2, we will take a look at day trading strategies, the pro’s and con’s of that approach, and what market conditions are best suited for that style of trading.
The Stock Bandit
thestockbandit@thestockbandit.com
www.thestockbandit.com
Like others, I have often wondered whether I should be day trading or swing trading. I have found ways to do both, and each style has its advantages and disadvantages. Ultimately, I think it’s a question traders should continually ask themselves, rather than just once early in their trading careers. Isn’t adaptation the key to successful trading over time?
The adaptive trader is always evaluating current conditions. Always be asking yourself questions. Is the market in an uptrend? Is the market in a downtrend? Is the market trending at all? Are the intraday moves smooth with good volume, or are they narrow, choppy and drifting on light volume? By staying aware of current conditions, a trader is able to determine which trading style will suit him best in the near term, allowing him to limit risk and maximize the rewards of profitable trades.
As you consider the best way for you to trade, be sure to evaluate your own personality traits. By employing a trading style that corresponds with your personality, you are essentially being your own best friend (a cheesy phrase but a necessity for traders). If you’re patient, consider a longer timeframe. Your personality will help you to stay in positions while you wait for the outcome to develop. If you are hyper-active with lots of energy and a short attention span, you may be better of day trading smaller incremental moves on a short term basis. Take stock of your personality when contemplating the best trading strategy for you, and soon you’ll be on the right path toward claiming the profits that have your name on them.
In Part 2, we will take a look at day trading strategies, the pro’s and con’s of that approach, and what market conditions are best suited for that style of trading.
The Stock Bandit
thestockbandit@thestockbandit.com
www.thestockbandit.com
posted by The Stock Bandit at 9/26/2005 07:51:00 AM
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