Basics For Developing A Good Strategy

[MerryDay]

The Basics for Developing a Good Strategy

All strategies should incorporate:​

A Support & Resistance indicator https://stockcharts.com/articles/dancing/2016/10/why-support-and-resistance-works.html​

A Trend/Momentum indicator Where are you going? What are the chances you are going to get there?​

A Volume indicator Volume drives price.​

The above links are a great place to start. These are sorted to the most popular studies on the forum.​

This VIP chart setup is just an example:​

https://usethinkscript.com/threads/buy-the-dip-basic-chart-setup.14773/​

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Never trade on just one indicator. ​

Whatever your strategy, additional indicator(s) give confirmation that improves your odds of being profitable. As long as those indicators do not have multicollinearity.​

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Never trade on just one timeframe.​

Analyze different aggregations to get a complete picture of what is happening w/ an asset.​

https://usethinkscript.com/threads/best-time-frame-for-trading-for-thinkorswim.12209/​

VIP:​

https://usethinkscript.com/threads/automated-trend-line-drawing.18181/#post-139275​

https://usethinkscript.com/threads/automated-trend-line-drawing.18181/#post-139310​

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The likelihood of success increases when multiple time frames are analyzed.​

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Never enter into a trade without a strategy of when you are getting out.​

Studies have consistently shown that it is not poor entry points that are causing retail investors to lose money; it is poor exits.​

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This advice from @Pensar: Any trading strategy, no matter how simple or complicated, will have losses. There is no way to avoid them. That's why it's critical to use stops, regardless of your indicators or method.

Research and understand position sizing, probabilities, and risk-to-reward - these are highly important to successful trading.

Remember that indicators only indicate, not predict - 99% of indicators are based on price or volume, so understanding the market structure is critical. Look at market and cycle and analyze consolidation/expansion periods to provide insight into market structure and price action.


Are there traders that make money and don't follow these basic tenets of Technical Analysis? Absolutely! But if you are not one of them, incorporating these concepts into your strategy could help.

You can google the basics of a good strategy for more information. This Technical Analysis Cheat Sheet link has a whole set of articles, I found informative in helping me develop successful strategies. Do not be put off by the word 'dummies' in the title. These articles are comprehensive but understandable.

CAVEAT:
Scalpers (members who trade on 5min and below charts), by and large, eschew technical indicators due to lag.
Read more:
https://usethinkscript.com/threads/price-action-toolbox-for-thinkorswim.10747/

Hope This Helps

 

[MerryDay]

The Best Months To Trade

90% of my trading (outside of earnings) occurs in November through April and July.

Calendar Time Anomalies To Watch Out For:

• Halloween indicator: Equity securities experience higher returns between October 31st and May 1st. Algos and Investors restructure their portfolios for tax purposes. Leading to the boost in new trend patterns.
• July effect: Also referred to as the July phenomenon. Investors often attribute this boost in higher returns to factors like the release of second-quarter earnings reports and the anticipation of summer vacations, which can boost consumer spending.
• September correction: a seasonal bearish trading pattern fueled by investor psychology.

Hope this helps.