Intermediate Trading Strategy - Part 1
IMPORTANT NOTE: If you are looking for a shortcut then this is not for you! This is for individuals who are enthusiastic about putting in the time and effort but may lack the structure.
I plan out my trades through in depth technical analysis, risk management and market research. I believe that consistency is the most important factor in regards to trading profitably. A traders success is determined more by the consistency of their approach than it is by the quantity or quality of indicators being used.
Over the long run, a consistent process combined with a sound strategy will net a disciplined trader far greater returns than the market average.
If you have any questions then feel free to leave a comment or send a private message.
Click here for Sawcruhteez’ Trading Process
Before Making an Entry
Identify Trend
Higher highs and higher lows = bull market
Lower highs and lower lows = bear market
Lower highs and higher lows = triangle continuation pattern
Equal highs and equal lows = Consolidation/Range
Tyler Jenks’ Consensio
Price > Short term MA > Long term MA = Bull Market
-I like to use the 50 & 128 day MA’s by default for crypto. For traditional markets I use the 200 MA.
-For short term price movements (1 month or less) I like to use exponential moving averages. 12 & 26 EMA for crypto and for traditional markets the 9 & 21 EMA.
Welles Wilder’s ADX
If ADX > 25 then trending market
If ADX < 20 then no trend is present
If +DI > -DI then bull trend
If -DI < +DI then bear trend
In extreme circumstances I will bet against the trend. This will only happen when the risk:reward is too favorable to pass up.
Identify Time Horizon
Investment
Is this a 10+ year investment? If so then I will dollar cost average my way in and not even look at the charts or listen to the news. Investments are not meant to be babysat, they are meant to develop over time.
Bet it then forget it!
Position Trade
Buy/sell breakouts and attempt to hold on for the duration of the trend. This is done through technical analysis and trailing stop losses. If I am in a position trade I will tend to it daily by looking at charts and managing stop losses. It is not required to ‘baby-sit’ the position by watching it all day and this approach is actively discouraged.
Position traders do not concern themselves with intraday movements. Managing the position too closely will often cause traders to make mistakes they wouldn’t have otherwise such as: taking profit too early or adjusting stop losses in the heat of the moment.
This is my prefered method of trading for a number of reasons. Primarily it is because I like to live a balanced life. I like to be able to set my stop loss and forget about it while I am out playing golf, skiing or at the gym.
Time horizon for a position trade is often a couple months or even a year+
Swing Trade
“Markets do not go straight up, nor do they go straight down.” There is an ebb and a flow to the price movements. Swing traders try to capitalize on the daily - weekly price movements. Is price at resistance? Sell. Is price at support? Buy.
Swing traders have well defined price targets. They can trade within ranges or in trending markets but they generally do not hold through significant resistance in order to speculate on the price movement. If it does breakthrough resistance then they can re enter without as much risk.
Day trade
Mostly scalpers and high frequency robots. In traditional markets the price generally isn’t very volatile on an intra-day basis so most traders will use high leverage. This will allow them to 10X, 50X or even 100X a 1% price movement in the underlying asset.
In crypto the market is volatile enough for day traders to make a very handsome profit without using leverage. This approach is still the extremely risky.
I plan out my trades through in depth technical analysis, risk management and market research. I believe that consistency is the most important factor in regards to trading profitably. A traders success is determined more by the consistency of their approach than it is by the quantity or quality of indicators being used.
Over the long run, a consistent process combined with a sound strategy will net a disciplined trader far greater returns than the market average.
If you have any questions then feel free to leave a comment or send a private message.
Click here for Sawcruhteez’ Trading Process
Before Making an Entry
Identify Trend
Higher highs and higher lows = bull market
Lower highs and lower lows = bear market
Lower highs and higher lows = triangle continuation pattern
Equal highs and equal lows = Consolidation/Range
Tyler Jenks’ Consensio
Price > Short term MA > Long term MA = Bull Market
-I like to use the 50 & 128 day MA’s by default for crypto. For traditional markets I use the 200 MA.
-For short term price movements (1 month or less) I like to use exponential moving averages. 12 & 26 EMA for crypto and for traditional markets the 9 & 21 EMA.
Welles Wilder’s ADX
If ADX > 25 then trending market
If ADX < 20 then no trend is present
If +DI > -DI then bull trend
If -DI < +DI then bear trend
In extreme circumstances I will bet against the trend. This will only happen when the risk:reward is too favorable to pass up.
Identify Time Horizon
Investment
Is this a 10+ year investment? If so then I will dollar cost average my way in and not even look at the charts or listen to the news. Investments are not meant to be babysat, they are meant to develop over time.
Bet it then forget it!
Position Trade
Buy/sell breakouts and attempt to hold on for the duration of the trend. This is done through technical analysis and trailing stop losses. If I am in a position trade I will tend to it daily by looking at charts and managing stop losses. It is not required to ‘baby-sit’ the position by watching it all day and this approach is actively discouraged.
Position traders do not concern themselves with intraday movements. Managing the position too closely will often cause traders to make mistakes they wouldn’t have otherwise such as: taking profit too early or adjusting stop losses in the heat of the moment.
This is my prefered method of trading for a number of reasons. Primarily it is because I like to live a balanced life. I like to be able to set my stop loss and forget about it while I am out playing golf, skiing or at the gym.
Time horizon for a position trade is often a couple months or even a year+
Swing Trade
“Markets do not go straight up, nor do they go straight down.” There is an ebb and a flow to the price movements. Swing traders try to capitalize on the daily - weekly price movements. Is price at resistance? Sell. Is price at support? Buy.
Swing traders have well defined price targets. They can trade within ranges or in trending markets but they generally do not hold through significant resistance in order to speculate on the price movement. If it does breakthrough resistance then they can re enter without as much risk.
Day trade
Mostly scalpers and high frequency robots. In traditional markets the price generally isn’t very volatile on an intra-day basis so most traders will use high leverage. This will allow them to 10X, 50X or even 100X a 1% price movement in the underlying asset.
In crypto the market is volatile enough for day traders to make a very handsome profit without using leverage. This approach is still the extremely risky.
Comment:
Part 2
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