|
Swing Trading For Gigantic Profits - Choosing A Winning Stock Market Trading System
By: Peter Lim ,CFP
It is surprising that many traders fail to take into consideration their own
risk profile and also trading psychology in trying to find a winning stock
market trading system that they can use daily to make consistent profits from
the stock market.
On one occasion a trader approached me for some advice to create his own winning
stock market trading system. Flushed with funds, he invested in a copy of an
advanced stock market analysis program that had won awards for some 5
consecutive years as the best technical trading system for stocks and
commodities. Costing over $5,000 this software would be a trader's dream in
tracking and trading the markets.
The use of the software involved re-learning a process of trading. The software
had trading systems based on a combination of advanced WD Gann and Elliot Wave
Techniques, and soon this trader was familar and able to input his trading
system into the system tester to track, analyse and trade.
But was he happy with his system?
One week later, he rang me up on the phone and said." Why is it that the stock
pick list from the system does not change for 4 days? Why are the stock picks
not moving anywhere...even after 4 days they have been identified."
You see, he has not considered his trading needs, his personal risk and trading
psychology.
Here he was, a trader who thrives to trade and can take more risk. Here was a
trader who loves the trading action. He would be best seen making trades every
day, and not sitting down there at the trading room or in front of his own
trading desk observing and watching for the best moves to develop before he
places his trades.
Instead, he has invested in a software that delves into the longer term trading
system of elliot waves, of trading with the trend, of watching for trading
opportuinities to set up when time and price meets for a change in trend
according to the teachings of WD Gann. All these take time to develop, chart
patterns take time to form and meanwhile this trader is unable to just sit and
wait!
So if you are a trader who can take more risk and you want action - you want
daily action - then choose a trading system that involves outbreaks of price and
volume, rather than trading systems that are based on longer term setups
involving time, price and pattern.
Of course, you can drop down to a lesser time frame to trade, so instead of
using daily data to track your stocks with the trading system, you can move down
to a lesser tracking time frame by using intra-day trading charts and trade the
setups from the intra-day charts.
In the end what did this trader do? Did he chose to trade intra-day with
intra-day charts?
No, this trader merely shifted his focus to an outbreak system of price and
volume with a cheap software costing less than $500 and has been enjoying his
trading ever since.
So if you are a trader, and are looking to work out a trading system with a
software, consider your own trading psychology and risk profiling, and how often
you like trading action.
About the Author:
Peter Lim is a Certified Financial Planner. He is the author of "Swing Trading
for Gigantic Profits" which reveals how you can be a winning swing trader at
http://www.signaldot.poolofwisdom.com/swingbook.phtml He also provides free
resources on profitable trading methods at http://www.online-guides.info/Swing-Trading
|
