Trading Strategies that work

Trading Strategies that work. I’ve heard numerous clients and colleagues over the last 18-months describing how the current markets are the hardest they have experienced in a decade. One of the key lesson’s I’ve learnt in nearly 15 years as an analyst is that no matter what the markets are doing, you have no control over what tomorrow will bring. Hence, Risk management and choosing the right Trading Strategy are the absolute keys to success in the markets.
You might think it simple, but how I view the markets is that they can only trend in one of three directions at any one time: Up, Down or Sideways. So while most people are trying to second guess which way the markets are likely to go, I already know! Fact is, I don’t know what is going to happen in the future, I just know that the markets will either be Up, Down or Sideways.
For this reason, my focus (as a professional analyst and advisor) is not on trying to choose what direction the markets will be on a day to day basis. This will do your head in, as there will be days you get it right, days you get it wrong, and days that just simply do both! My focus, is to choose a strategy that best suits the market conditions now, evaluating the Risk of the position if the markets go Up, Down or Sideways.

Think of it as having all your bases covered.

The Stock Investor is limited in what they can do. They need the stock price to rise higher from where they had bought it, and they need to decide when to Sell. Quite often I will have new clients come to me and find that they had chosen stocks at a reasonable price, but failed to exit for a profit, resulting in holding stocks that were now worth less than where they had bought it. In most cases, the stocks get forgotten about and put in the bottom drawer for “long-term” investment. But did you realise you can profit from the stock market no matter whether share prices went Up, Down or Sideways?

Trading Strategies that work: Did you realise you can profit from the stock market no matter whether share prices went Up, Down or Sideways?

Using a combination of Stocks and (Equity) Options, I have numerous strategies available to me that can benefit from Upward moving markets, Falling markets and Sideways markets. I can adopt strategies that benefit from high volatility or low volatility. That are suited for short-term or long-term time-frames. And due to the Internet and online broking facilities, I can trade any stock, commodity or currency in the world. And I don’t have to do this at a high cost or using higher Risk futures contracts.
Using stocks, options and Exchange Traded Funds (referred to as ETFs), there are many different types of approaches you can take in the markets. Just like a game of Chess, you can adopt a different strategy depending on the flow of the game. And, you can modify your strategy if the game is going against you.
For today’s article, I’m going to concentrate Volatility and Non-directional markets. Which are the trading strategies we have had to deal with throughout 2012.
Non-directional markets are certainly difficult for the Buy and Hold investor. And for the short-term trader, you need to be “In the Zone” with a clear and decisive plan to capitalize on fluctuating markets.