In order to trade stocks or other equities effectively, it's important to know and understand what kind of trader you are. Have you ever looked at a stock chart and thought you saw a bullish pattern (an upward trend)? Select a different time frame with the same stock and you might find yourself not so confident anymore. Different time frames tell different stories.
Basically figuring out which kind of trader you are determines which time frame you 'like' to trade. Do you think you can profit from quick drops or peaks in the market, you may fall under the category 'scalper'. A scalper applies the so called 'fade strategy' in trading. When there's a quick drop in the markets the scalper buys at the low and sells it quickly when the price of the security goes up just a bit, or the other way around, short selling when there's a spike in the security's price with the underlying thought that the security is too overbought, or previous traders who bought the stock are cashing in on profits. The scalper won't last very long though. It takes a tremendous amount of stress, and it's simply an exhausting technique.
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Basically figuring out which kind of trader you are determines which time frame you 'like' to trade. Do you think you can profit from quick drops or peaks in the market, you may fall under the category 'scalper'. A scalper applies the so called 'fade strategy' in trading. When there's a quick drop in the markets the scalper buys at the low and sells it quickly when the price of the security goes up just a bit, or the other way around, short selling when there's a spike in the security's price with the underlying thought that the security is too overbought, or previous traders who bought the stock are cashing in on profits. The scalper won't last very long though. It takes a tremendous amount of stress, and it's simply an exhausting technique.
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