Blog

Why Modern Trading Needs Multiple Approaches

Today, the share market is faster, wiser, and more competitive than ever. Specifically, there is information available in real-time, and there are thousands of traders eyeing the same opportunity. Thus, you may want to adjust your trading style since only using one trading strategy is no longer probably sufficient. Today’s successful traders use an integrated approach that involves using each of the following strategies together: medium-term directed plays, short-term momentum, and automated trading, all while applying a bunch of good old-fashioned trading discipline. By not relying on just one trading strategy, you increase your ability to seize opportunities, better manage your risk, and develop a longer-term competitive advantage in stock market trading. Momentum Trading When speed and strength are in your favor, momentum trading is the way to go. This trading style looks at stocks that are moving quickly in one direction (often from news, earnings, or from overall market sentiment). Traders jump in and ride the wave in the stocks and quickly get out when the momentum slows. -Example: If a company reports earnings that are better than expected, it may have one day in which it has a 10% gain. Momentum traders enter the stock early to catch...