One Sure Shot Method For Profiting In This Tricky Market
One Method for Profiting in this Tricky Market
This market reminds me of a few years ago leading up to March 2005, where every bounce was an invitation to short sell (up until the final low was made). That market provided me with one of my better stretches of consistent profits, ironically with somewhat small position sizes.
Back then, the back-and-forth market action was producing sharp pullbacks and bounces much like what we're seeing now, and I was trading a very effective method which was low-stress yet highly profitable. Call it the 'Pick and Grin' approach.
Pick and Grin This is NOT the Pick and Grin I'm referring to.
Pick & Grin This is NOT the Pick & Grin I'm referring to.
What I would do was establish small pilot positions (pick) in stocks on reaction bounces anticipating a move back down one time the bounce was sold. This system of initiating smaller positions, booking some fast gains, & adding exposure when the stock returned to earlier levels was excellent to me. If my entry timing was poor, it didn't matter a lot because I was only in a partial position. Depending on the stock, I'd either add the remaining shares up to my intended size (average down the great way), or cut the trade entirely & look for a better spot to re-enter.
One time the stock began to weaken, I'd place bids to cover at least half of my position, booking profits as the trade developed in my favor. If the move was sharp, I'd take most of it. If the move was slow & steady, I'd scale out on the way down. Then I'd patiently wait for the relief bounce or oversold bounce to arrive so that I could remount the shares that I had covered.
Right now, this market is making it very difficult to hold positions for very long. The sharp spikes upward we're seeing are being followed by dizzying spirals right back down, making it much tougher to not only locate nice swing trading candidates, but also harder to hold them.
Take the Pick and Grin approach until things smooth out. With the sharp market moves likely to continue for at least a little while, it won't hurt to trade a little smaller. Additionally, the add-and-subtract style of the Pick and Grin approach will let this back-and-forth market play to your advantage.
Article Source: FxTradingStock.com
About the Author
Want to find out more about Nifty Options Tips, then visit Sam Kallis' site on how to choose the best Intraday share market Tips for your needs.
by: Sam Kallis
Total views: 30
Word Count: 406
Date: Sat, 17 Jul 2010
Publish/Share this article
To use this article on your site click here to get the HTML code
Rating: Not yet rated
Login to vote
Related Articles
A Stock Trading Service That May Teach You How To Make Money Day TradingBe Careful While Trading Penny Stocks
Day Trading Secret To Survive With Your Investments When The Stock Market Doesn't
MBT Shoes Appropriate Way to Walk together with your MBTs
Know about Trading Psychology
What You Must Know About The Future Day Trading
The Definitive Guide To Swing Trading
Make Money In The Markets As You Get Your Stock Trading Training
