The most important thing you need to understand in trading...
As a professional trader whose income depends on trading I pay great attention to risk management. The objective is to make lot of money without losing money. Which essentially means avoiding certain market periods and proactively going in to cash or short and same way to get in t new trend at right time.
To do this I use a risk management tool based on market breadth called Market Monitor. The Market monitor turned negative 9 trading session ago and we closed all long positions.
For swing traders and position traders a market timing filter is very important. You should have some filter to tell you when is the right time to be in market on long side. When should you be in cash or short. And when should you climb back in to market. Absent that you will go through cycle of gains and losses.
If you want to stop that cycle then study market timing tools. There are large number of tools which tell you when to be aggressive and when to be on sideline.
5 comments:
would you mind telling if this is bottom or can we expect more downside?
also can you mention the tool to use to determine when to be on sideline?
?It is not a bottom yet. In order to determine when to be on sideline study market breadth based indicators. There are lot of posts on that on this site.
You gave a very good advice. I read a post about breadth explanation last week, but I didn't print out. I'll read again this week end.
Luckily this time I was basically cash because I saw the "range market" on major indexes and I waited a break above to buy more when close to the top. And I avoided buying dell because leaders stocks fell badly. Have a nice week end
ps: and the breadth you post on this blog helped ;)
Great market monitor! Can you tell me the definition of 34/13 bull and 34/13 bear? I like to make a monitor like yours. appreciated. I'm also a swing trader and I am enginer by training
34/13 bullish= number of stocks up 13% in 34 days and 34/13 bearish= number of stocks down 13% in 34 days.
Post a Comment