Stochastic, MACD, Bollinger Bands Plus Day And Swing Traders

Learn How To Day And Swing Trade Using Stochastic, MACD, Bollinger Bands Like A Pro

Practical Tips For Traders

The financial markets have changed since the advent of the high frequency traders.

Therefore a new approach must be adopted if one wants to avoid piling up rapid and steady losses.  Trading is now fast and more trickier than before.  In this article I will be sharing practical tips that will help one to cope with the new trading environment.

Before, we continue, I would to inform traders that the decisions are theirs because this is my opinion.  One does not have to take those tips at face value.
Let's get started.

What Has Changed Since Then?

Retail technical traders are now competing with the trading algorithms, trading computers and high frequency traders that have an  immense advantage over normal retail traders.  The game has effectively changed. 

Therefore, one must adapt to avoid being the KFC fried chicken in the hot oil. 

I have question.

Have you ever played an Android game against a computer or algorithm or virtual opponent?

Quite often, the game is pretty fair for a while until the algorithm has gathered enough information or statistics about you then began to predict your next move before you even moved a finger. 

Well, the algorithm has an edge from that point onward, and can slap you with many losses in a row. 

Have I already said that those are my opinions?  Alright, good!

Though, scalping, day and swing trading are different games, there are similarities.

My view is that many technical traders have been losing unnecessarily just because scalping and day plus swing trading become too fast and a little bit unfair. 

The main problems are short term price fluctuations, inadequate stop losses and less time to hold positions.  In many cases, competent technical traders who have made the right calls end up losing because their stops have been taken out too fast and too soon. 

Would you agree?  Have you noticed that sometimes after going away from the computers, you come back, and see that the price has done exactly what  it is supposed to be doing few days earlier? 

In that instance, one does not have enough time to hold on or carry on and the stop loss is taken out.

In other cases, it is just, one is not yet able to achieve consistent winning trades. 
Yep, we can not just blame everybody except ourselves.  That would not help.

Those that are still learning to trade can keep it up even though they are the most vulnerable market players in that atmosphere. 

Another challenge that retail technical traders are facing is the lack of enough trading fund.  Though, the quantity of cash one has in the trading account is not the most important thing, it does help competent traders in many cases.

Contrary to the retail traders, market players that are using trading algorithms and trading computers have more liquidity apart from their unfair advantage of high speed trading tools.

So all in all, that is the state of most technical traders in comparison to the speed new market players.  Indeed, the financial markets trading landscape and atmosphere have changed and no one can deny it.

What Should One Consider To Do?

One ought to use an investment account for trading in order to avoid being put under pressure too soon to take losses.  I mean one is buying and holding like an investor for technical trading purposes. 

That is the name of the new game of technical trading like an investor.

For example a swing trader can use the trading212 investment or ISA account with zero commission to buy and hold as a technical trader.  The only time that trade is closed is when he or she decides to close it. 

So one buys and the price swings south 100 pips.  That is not a good thing, but if one has made an excellent trading decision, it is just a matter of time before one will return into profit. 

Of course if one is completely wrong, one may be stuck with that loss until the market reverses.  The good thing about that is if one is a competent technical trader, one has enough time to hold on instead of being forced out urgently.

It makes sense?  I believe so.

Well, I think one will stop bothering God with such prayers like Oh please let the price turn around now please.  Oh Lord, do not let them take out of the trade so soon and so on.  

Alright, I know that traders who do not swear, do pray when the price is coming near the stop loss.  Whether you open your mouth to pray or not, just wishing that it does not take it out is also a prayer.  

Having said all these things, I am not saying that one should become careless and splash trades all over the place without following the trading drill and top-down trading

The new technical trading account that is using an investing account instead of a trading one demands that one grows from a technical trader into a sophisticated market player who combines technical and value investing. 

For some, it means going back to the black or white board to craft a robust but viable strategy that helps.  Indeed, a technical trader who adopts the mindset of an investor may hold a position for months or years if he or she chooses to do so.  At the same, nothing should stop one to take a nice profit when it is ready.  Right?

Mistakes Not To Make

One of the mistakes one must avoid is to take real money and buy like an amateur trader.  What will happen is that one may end up locking away a large sum of money in that investing account for a long time because one has been really wrong. 

So when one needs the money, one could not bear with taking losses and cashing out may be only 10 or 20% of the initial capital.  You get it?

One thing is certain is this new approach is beneficial to those that can trade like a pro.  One must learn to improve trading and trade like a pro because using the investing account only helps one to avoid being forced out of a trade without one's consent. 

I will not yet go into how to manage the trading investing account this time.  That will be another discussion on another day.

What Do I recommend To Technical Traders?

I recommend the trading212 investing and ISA accounts for those of you who can trade like a pro, but do not want to be losing just because of a lack of time.

I recommend that technical traders sat with their favourite drink in a quiet place and digest the following articles:
1/ Fractional trading tips.
2/ trading versus investing.
3/ Stay tuned on our websites.
Stochastic-macd.com
Dayprotraders.com
24Elliottwaves.com

I also recommend that those who have not began to learn how to invest, start to learn it.  Really, a technical trader must grow to become a fully fledged sophisticated market player.  That is the goal.  That means, one is able to play the short, medium and long term financial markets game without being bullied by anyone. 

For some, it may take up to five years, but others may complete that challenge in ten years.

How old are you now?  Just kidding.  If that is for you then give it your very best.  In not then probably you will excel in something else in life.  Trading or investing is not for everybody.

I will also recommend that one sticks to the five percent money management rules because the financial market can be unpredictable in tricky times.  One wants to play it safely and wisely.

Also, download the Smart News App onto your smartphone and connect to as many financial market websites.  Be updated and keep learning.

Warning
What I recommend here reflects my opinion and should be accepted as such.  In the end, the decision is always yours.

Alright, I must stop here because I like to talk too much sometimes.  Have I missed anything? 

Well let me know please.  Please feel free to post your questions and comments at 24stocktrader YouTube channel, and in due course I will answer you or post a relevant educational video.

Please stay tuned because soon I will be back soon with another revolting trading article.

Conclusion

Day and swing trading have become tricky to retail traders lately, but there is a way out using an investing account instead of a trading account. 

One does not want to be forced out a trade because of the short term price's fluctuations though one is ultimately correct.  That madness must stop especially if one is trading like a pro.

Of course the investing account is not the only solution, therefore I recommend that technical traders keep learning, and aim to grow to become a sophisticated market player that combines both technical and fundamental analysis. 

There are no more excuses to be forced out of genuine positions too soon.

That is it.  I hope it was a good one for you.  If that is the case, please share and bookmark it.  Do not also hesitate to say few good words about us in various trading forums.

I wish you the very best.
Happy Trading To All

This article is written by
George Beaulieu
Founder Of Stochastic-macd.com
Website