Should We Follow TRADITIONAL OR ADVANCED Trading Methods?

September 1st, 2017 → 11:40 am @

Should We Follow TRADITIONAL OR ADVANCED Trading Methods

 

It is the very important thought that comes in mind of a beginner “should I follow traditional trading methods or advanced trading method?” Actually what is the difference between the two? Let’s analyze, 

Most of the traders trade by analyzing some of the following Trading Strategies like, Breakouts, Retracements, Reversals, Momentum and Position trading. Most common technique used in market to trade is the breakout. Breakout trading consists of identifying a particular price value and then selling or buying as the price breaks that pre-calculated value. The breakout concept is relatively simple but requires a reasonable understanding of support and resistance level. Whenever adopt breakout trading it will ensures that you never miss the move when there is a trendy market that is market moving strongly in one direction.

The next is Retracements, Retracements is slightly different than breakouts. Skill set required for this is different. Here traders identify a clear price moving direction and expecting that price will continue move in that direction. In fact for each up move there is a down move. Professional traders enter just before the continuation of the move and they will take profit. But novice traders attempt to trade in opposite direction and will lose. Traders who follow technical methods usually use Reversals at little fundamental activity time. During this time market shows a range and bound move rather than a clear move. When Traders saw low volume market activity they look for key price levels and make the move. These bounces give them quick opportunities to make profit.

Momentum trading is focus more on force and continuation of the move and less on ‘precise’ entry. Traders are not bothered about past price actions but merely moving in the prevailing trend direction. And the last but not the least Position trading. Prevailing fundamental conditions driving the price is the main confidence behind this strategy and assumed that market eventually move in the desired direction.

In traditional trading these analyses are done with the help of some indicators, fundamental strategies, columns, research and study from articles. All are done manually. All these are time consuming process in our daily busy life. In trading we will have no surety about the direction of market movement, so for making an accurate and correct decision we have to rely on probability this will help you a lot. 

Advanced techniques include trading by technical analysis, and by using software etc. With respect to price and volume transformation Technical analysis develops models and trading rules, such as the relative strength index, regressions, moving averages , inter-market and intra-market price correlations, business and stock market cycles or, classically, through chart patterns detection. It is easier to automate trading while using trading software, especially for short term intensive activities like day trading but is also useful for long term trading. When the time goes on we must go with it. If not we may stuck somewhere. So if we go with traditional methods the up comers will overtakes us with their advanced techniques. In advanced trading techniques,

1. Choose a swing levels from where you must start drawing. 

2. Look for a potential trade and choose particular level.

3. Keeping capital exposure in mind and find a way to enter the trade.

4. Find a way to exit the trade even if profit or lose trade


“Go with advanced techniques and become a successful trader”.

 


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