Personal Attribute and Strategy

What every trader strives for is a low-risk, high-reward system that consistently produces results. Fundamental and Technical analysis are the two main schools of thought in the financial markets that will allow a trader to achieve this. Within these are vast range of systems and techniques that a can be utilized.

A selection Fundamental Analysis styles include Value, Contrarian and Growth.

A selection Technical Analysis styles include swing, trend and pattern trading.

Determining what style and strategy one uses depend on different factors of the trader/investor. Everyone will have their own strengths and weaknesses and these traits need to be consider when developing your trading plan. The following are a quick outline of my trading strengths, weaknesses and circumstance that helped direct me to the strategy I am trying to implement.

1. I cannot handle long-tem investing. I don’t have the patience to wait months for results, read hundreds of reports and believe someone else’s fundamental analysis. I also haven’t found a fundamental analysis technique that someone can write down their steps for me to learn and understand.

2. Unfortunately I am one of those people that want to understand why something works. It’s not enough for me to accept that something does work. I think this is why I’m a computer programmer by trade. This leads to me over analyzing a complex system, and trying to delve deeper into its workings. These then leads me to question parts of the system.

3. Working all day requires me to use and end of day system. Although I do have time throughout the day to monitor my trades and enter/exit when required, my eyes cannot be glued to the screen. I utilize Quote Tracker’s alerts feature to let me know when pre-determined levels are reached.

Conclusion
1. To ensure I stay focused to the the trade plan the system must be short to medium term
2. System should be based around technical analysis
3. System must be simple enough for me to understand why it works
4. Utilize minimal indicators
5. Allow optional intra-day entry/exit or end-of-fay entry/exit without requiring focus on ticker throughout day

Has anyone else analyzed their personal attributes to see if they match their trading strategy?

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Market Direction

The psychology of the market has shifted, highlighted by The Stock Bandit in a post titled When Bulls become Sellers. Its an interesting post about the current market conditions and how traders change direction in uncertain times.

"Those same bulls are now much more likely to become sellers into bounces. Will they sell at the first sign of higher prices? Yes, some will. Will some of them try to endure this pullback but eventually capitulate and flee for the safety of cash? Of course."

Motivations and confidence in the market have altered. The bulls can't afford to be bullish all the time and a safer direction has to be taken when conditions around you change. Looking at the chart I posted yesterday, corrections occur and until the bull becomes a bear these conditions need to be traded as such.

Beginning of a correction, the rumblings of a bear market or a mere blip in a bull market are all possibilities. Most views that I have read point towards the bull returning and fear of the bear seems to be at a minimum.

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