Stochastic, MACD, Bollinger Bands Plus Day And Swing Traders

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

Trading Edge Tactics

Trading on the edge helps technical traders to trade with a reasonable stop loss and control risks. 

Trading in a void is the opposite of trading on the edge because in that instance, one is just taking trades anywhere, and anyhow without any consideration to the risk factors.

The objective of this article is to warn traders about the dangers of trading in a void, and show them the advantages of trading on the edge.  The good news is that anyone can trade on the edge if one is willing to adopt a more disciplined approach to technical trading.


Trading Edge Tactics One

Be sure that a high probability trade setup is also on the edge of a key level.  If not, it is riskier.  One ought to trade it cautiously.

Trading Edge Tactics Two

All bearish trade setups ought to be on or near a key level or resistance.  If not, engage with it like a prudent day and swing trader. 

Many times, a technical trader takes a bearish trade that is off a key level, and the price will rise first to that level and take him out before starting to decline.

What is happening is that professional traders have placed limit orders around that key level above.  Those orders have attracted the price, and it surges to fill those orders to sell.  It does not matter whether it is a high probability bearish trade, one still have to control the risks.

Please note that the trade can be successful few times even if the setup is not on the edge.

However, the rate of success is higher on the edge of a key level.  It is important that one always analyses the risk-reward ratio in all cases.
The decision is yours, but it must be a smart decision.

Trading Edge Tactics Three

The intersection between two trend lines, any key level and pitchfork tool, or a key level and other horizontal support and resistance levels constitutes a hot spot trading zone.
The rate of success of trading on the edge of a hot spot trading is also higher than those trades in a void.

One can also use the intersection between Fibonacci key levels and trend lines.  The general rule is to find the intersection of two key levels.

Trading On The Edge Four

One can trade on the edge of a median line, pitchfork tool, support or resistance level, trend line, high, low, open, close, six cortical price levels, pivot points, significant high or low and so on.

A trading setup that is not on the edge can cause losses. 

Really, the difference between an ordinary technical trader and successful professional is that the pros always check the risk-reward reward ratio before trading the high probability trades on the edge.

To win as a technical trader, one must first be defensive.  One of those defensive measures is to combine the risk-reward ratio and trading on the edge.

Trading On Edge Tactics Five

The simplest way to trade on the edge is to trade on the edge of a rising or declining channel channel.  One can quickly improve technical trading by just going first to a higher time frame; and draw channels, key levels and trend lines before switching to the signal time frame to take the signal on the edge. 

At the time of the entry on the lower time frame, one will again enter the trade on the edge on that time frame.

Whether it is the trade signal, setup or entry time frame, one ought to trade on the edge.  In many cases, channel traders forget about other key levels when they are trading on the edge.  On the edge of a channel does not exclude the rising, declining, horizontal channels and triangles.

One should not forget about trading also on the edge of the ultimate and midpoint targets levels, median line of a triangle, dynamic trend lines or median lines of upper and lower half of a pitchfork tool.

Conclusion

Trading on the edge is the key to avoid setting up a large stop loss or being forced to adjust or move it because one has not taken into consideration the risk-reward ratio. 

Trading edge will surely put one in harmony with the professional traders who always place orders on the edge of a key level or hot spot trading zone. 

Limit orders placed on edge by the pros will be filled, and cause the price to move against weak stop losses.  It always wise to trade on the edge because one will only need a reasonable stop-loss instead of an unsustainable one.

That is it.  I think I have said enough.  To keep the conversation going, ask questions in the comments section at 24stocktrader YouTube channel, and I will surely get back to you.
Feel free to share this article if it has made your day.  Do not forget to say few good words about us in trading forums.  I really appreciate that.  Thank you for visiting Stochastic-MACD.com.

This article is written by G Beaulieu
founder of Stochastic-MACD.com.