My Favorite Stock Trading Strategy
There are many different ways traders analyze stock markets. One I’ve read many different books and signed up for several seminars that teach traders basic skills. So far the analysis method that I like is technical analysis. My favorite ways to analyze Stock Swing Trading Strategies is to use a combination of stochastic oscillator and moving average crossovers.
This way I can see if the stock is overbought or oversold as well as if the stock is trending or if it’s simply moving sideways back and forth.
Most professional traders use one of the two analysis methods but I like to combine them for best results. I also want to start using the RSI indicator but I’ve heard it’s a bit tricky in terms of sensitivity to stocks. For Futures or commodities trading I think it may work but for stocks the RSI is just not sensitive enough.
I like to set the exponential moving average at about 20 days back. Sometimes if I’m trading markets using 1 hour bar charts I will set the moving average to a shorter time frame. I’ve read in Traders Magazine that using anything less than 20 bars back is not productive with an simple moving average. But when using a Exponential Moving average on simple bar charts the method works best.
I trust this magazine since I’ve been reading it before the internet started. I think Technical analysis of stocks and commodities has been around for over 40 years.
Getting back to my stock swing trading strategy, I like to wait for the stock to rally above the moving average if I’m going to buy the stock and if I’m going to sell the stock I want to see it trade below the moving average, I get to see if the stock is trending strongly or if it’s not this way.
I’m also re-reading the first market wizards book this week and I will do a full review next week.
As soon as I start getting some traffic on this site, I will open up the comments and then we will really have a good time with this site.
Have a good day