The most important thing a beginner trader or struggling trader do is to find something that is structural in nature of the market.
The idea around which you want to build your trading should be inherent property of the market. If you find something inherently fundamental to market behavior your chances of success increase. Then it becomes more a challenge to operationalise that inherent tendency of market.
As a trader your task is to find some structural phenomenon to build your edge around.
It should exists in the market and not figment of imagination.
If you find structural edge it will last decades.
What are some of the structural things in the market:
1 Market moves in momentum bursts
2 Momentum stocks outperform non momentum stocks
3 longer term momentum is mean reverting
4 Surprisingly good earnings leads to rallies
5 News leads to immediate moves
6 small cap/small float outperform larger stocks
7 lower priced stocks outperform higher priced stocks
Now if you know any of these you can build your trading around it.
Structural edge is something that has been tested thousands of time and has been around for hundreds of years.
As a trader your task is to find some structural phenomenon to build your edge around.
It should exists in the market and not figment of imagination.
If you find structural edge it will last decades.
What are some of the structural things in the market:
1 Market moves in momentum bursts
2 Momentum stocks outperform non momentum stocks
3 longer term momentum is mean reverting
4 Surprisingly good earnings leads to rallies
5 News leads to immediate moves
6 small cap/small float outperform larger stocks
7 lower priced stocks outperform higher priced stocks
Now if you know any of these you can build your trading around it.
Structural edge is something that has been tested thousands of time and has been around for hundreds of years.
If you select one of the above structural phenomenon as your starting point you will find many ways to make it work.
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