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Tactical Trading Techniques for All Cycles
The Triple T Series. These powerful tips and tactics will help your portfolios, and trading accounts no matter which market cycle you may need to use them in.
Enter and scale into your positions. Use partial entries and exits.
Ever had a position that kept running in your favor after you exited? Or maybe it was the opposite; you watched all your profits slowly erode because you continued to hold, believing the asset to go higher and higher.
This tactic will help solve this problem. Leave a % available to ride higher. You can always enter the same position again at any time.
Understand your timeframe.
You need to understand how long you plan to hold a position. Are you on a 5-minute chart? 1-hour chart? Or have you been trying to trade on the four hour, daily, or even higher timeframes? Once you understand this, one strategy I found useful is to start with the higher timeframes and view them all in a top-down approach. For example, you begin with the weekly, 3 Day, 1 Day, 12h, 4h, etc..
This tactic will enable you to get a clear picture of the market you are trading and allows you to enter on the lower timeframes based on your holding time.
The truth behind a stop-loss.
A stop-loss is an art behind trading. You can read so many articles, and they all say the same thing. In its pure form, a stop-loss is designed to exit your position and reduce your losses.
In a perfect world, it should do just that. However, the reality is not so simple. They do not always work as anticipated or designed, especially in illiquid markets and larger capital sizes. They come in all shapes and sizes and impact every trader differently.
Are you always getting stopped out? And then the market runs in your direction? Your entry is terrible.
I could go on and on, and this is why stop losses are an art. It applies to everyone differently. The best solution is to lower your position size until you gain a feel for the methods that can work for you. There are numerous tactics I can go into more detail about another time.
And more, you can even create your own. Do not get stuck in a rigid mindset.
It may seem like you need to sell out of every position and run to the next significant market move. Chances are, if you are recently finding out about something, you are already too late. Instead, why not have a conviction in something you believe will go up? Wait for the pump to come to you.
Of course, you can ride the wave; however, you need to understand momentum, which will only come from market experience. Be careful riding waves. It is also a valid strategy once you have a plan to ride the major market movers.
Keep it simple at first. Do not jump from one strategy to the next.
A lot of new traders find a strategy and never give it enough time to play out. Keep your framework simple; give it time to play out. There is no need for information overload. Please keep it simple and steadily add to your arsenal. Your future self will thank you.
This article sums up a few powerful trading techniques that I wish I would have known when first starting trading.