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Transcript
Change is inevitable. Whether it’s the weather, governments, or viral video trends.
This principle holds true for the markets as well.
Financial markets can experience rapid changes, making it crucial to select the appropriate trading approach for you.
Market conditions fluctuate throughout the day, due to various factors such as economic news, geopolitical events, investor sentiment and trading volumes.
This requires vigilance from traders to adapt their strategies accordingly.
Market moves can generally be categorised into four combinations – volatile and sideways, volatile and trending, muted and trending, and muted and sideways.
Being able to identify the condition of the market is a key skill in a trader’s arsenal. Since they can adapt their own behaviour and approach accordingly.
To help you learn to identify what trading you might prefer, let’s go through them together.
First up trending and counter trending styles.
Trend following traders ride the momentum of an asset’s directional movement by entering trades in the same direction as the trend.
They use technical indicators and price analysis to identify and confirm trends aiming to capture substantial profits as the trend continues.
Counter trending traders on the other hand take positions that oppose the prevailing market trend. They seek opportunities to profit from price reversals or temporary corrections within an established trend.
Now if you do the swing…not that swing.
Swing trading is a method that aims to capitalise on price breakouts by analysing shorter term charts over a few days as opposed to the weeks or month typical of trend following strategies
Some traders adopt market neutral strategies to mitigate market risk.
We will delve deeper into this topic in other videos and provide an example of a specific strategy in this approach.
To conclude, picking your trading approach is all about identifying the trading style you want
that aligns with the market condition you’re in.
And remember in trading it’s all about you, your risk tolerance, available time, financial goals, personal knowledge, and experience.
So, if you’re interested in trading, stay tuned. Exciting things are coming.
See you in the next video.