Trading Style

When you trade, you trade objectively, taking in mind the market consensus from news, fundamental analysis or technical analysis: As a trader, you shouldn't be concerned about market downturns or booms. When you trade, you trade objectively, taking in mind the market consensus from news, fundamental analysis or technical analysis and simply trading that view. You have the choice of trading each style specifically or trading a combination of each technique, taking in the news as well as the fundamental information.

You have a choice on which style of trading you would like to adapt in your own trading in the stock markets. (Or the forex markets if you're adventurous). That is either to trade fundamentally or technically. Some traders like to mix it up a bit and trade a hybrid system that takes into consideration both the company situation and the chart behaviour. I like to do a bit of hybrid trading myself but in the end, the chart behaviour rules my trading system. In the next few posts I will be hashing through the many maxims and trading lessons that I have found to be true from my own trading experience and that other traders always seem to crow about in various books, seminars and tapes. So stick around, I hope you will pick up a few new tips.

Depend on the numbers not the news

This may be a contradictory statement to the above about hybrid trading, but don't fall into the trap of depending on the news too much if you are trading technically.

All traders are after the holy grail of share trading. If you are trading and not seeking that holy grail of trading, well what are you after? Are you after excitement? Are you after an adrenalin rush? Anyway, as I've established before, the markets is all about making money, and to make money you need to be profitable in your share trading. So I'm going to assume from now on that all share market traders are in the markets to make a tidy profit. And therefore all traders are after the holy grail. And some may have already have found that holy grail of trading stocks in the markets.

I was trading forex again... yes, I know, this is a share trading blog. But I think it is related, as it is still TRADING. Trading is certainly a transferable skill. And forex certainly does teach you to enforce those stops. Anyway, working away at my laptop the other day, I noticed that my productivity went down since I kept switching screens (ALT+TAB) to check out the current prices, watching the stock prices rise and fall. Now, I have two strategies that I know of that will keep my productivity levels high while still being able to trade efficiently. One is to buy another screen and set it to my side and the other is to set a trigger price at which I would action my trade - either to sell short or buy long into the trade. the first one is an expensive option - but I will be buying myself another screen in the coming weeks. The latter can be actionable now.

Whether you are a day trader, or a forex trader... whatever - you may already watch the news and read the stock market news regularly. But what I found the hardest to do - the most challenging thing to do was to read between the lines. How you interpret the news is a vital element in successful trading. Sure, it isn't critical to your success if you already have a successful trading system. But it sure is a bonus if you can read the news and interpret it so that you can make a trading decision based on that interpretation. Experience as well as confidence plays a large part of this news interpretation - reading between the lines.