I noticed, the longer I've been trading, the shorter my holding period becomes. When I was still starting out, I was a full fledged position trader. My maximum holding period was three months. I never day traded or held a stock just for one day. Well, things have definitely changed. The setups I like now were setups I didn't even dare trade. In momentum trading, I generally believe it's better when the price is located at the highs, and shallower corrections are preferred over deep ones. These days, such a belief system is no longer ideal. In fact, they can just get you killed. You can't just hit anything that moves nowadays because momentum is not always sustained.
I was trying to remember the setups I looked for when I was a position trader. I remember my "low risk" speculative bottom strategy. (Contraditory ba? Low risk but speculative? Haha!) Basically, I look for stocks that have corrected already. Then I look for signs of a slowing downside momentum. I have two buying opportunities:
1. On a small bodied candle (buy as low as you can);
2. When it looks dried up already.
I practiced this yesterday on MPI, EDC and FGEN, to which I got interesting results.
6 comments:
I think pag position trading mag set ka ng target price. Sell half of the position when your risked amount = x3 na then trail the rest.
Sam, what do you mean risked amount = x3? :P
Example kung yung stop loss(risk) mo would cost you say, 10k, pag yung position mo gains 30k na, sell na yung half then trail the rest.
R:R is 1:3. Yan pag kakaintindi ko :))
Ooooh, that's interesting. :)) Sige, I'll give that a try din. Thanks, Sam! :)
Your "speculative bottom strategy" is very similar to my "U-Turn Framework", which I use to identify tops and bottoms since the end of trends almost always have the same generic structures.
There are nuances to the "U-Turn Framework" wherein you can spot when a potential U-Turn is a continuation rather than a reversal plus other useful clues like u-turns within narrow ranges!!!
Anyway, I'm telling you are on to something here. I won't spoil the fun and let you firm up and expand your "speculative bottom strategy". There is more to it than meets the eye. Yes, I'm quoting GI Joe. :D
Ay mali, Transformers pala. Dope!!! =))
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