Good Example of Trading With Cycles

 

Here we have a good example of how to responsibly use trading indicators, with a focus on using both a moving average and a cyclic analysis to pre-qualify any one of the day trades discussed.   The following are points I’d like to highlight as you watch the video:

  • This example uses an index as the trading vehicle.  There is a lot to be said for this – whether using a futures contract, an e-mini, or an ETF,  trading an index based vehicle helps alleviate much of the short term noise.
  • The cycle indicator is proprietary, but if this is a typical representation, it would be a valuable tool for any short term trader.
  • The presenter says – on numerous occasions – that he doesn’t like to take counter trend trades.  By itself, that is an enormously valuable bit of advice.  You can (and some do) make decent money trading against the trend, but win/loss ratio will usually beat the tar out of most traders, psychologically. 

Bearing in mind this was filmed during a beginning of a bear market, when a lot of downside moves are large and ferocious and the gains can be a bit outsized, this is very handy demonstration of trading with cycles. 

Note: while I appreciated this fellow’s material, I am in no way affiliated with him or his trading organization. 

Stay timid,

Timorous

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Saturday, April 9th, 2011 Education, Stock Trading

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