With so many brokers, indicators and news at our fingertips today learning to manage your money can be overwhelming. Add that on top of deciding what strategy to use and it's no wonder why so many people fail at investing.
As an investor you can choose so many paths to make a buying and selling decision. From financial reports, discounted cash flow models, price patterns, indicators, oscillators and more. Maybe you want to combine all of this to come to one decision. As a trader new to this the search for the perfect signal is constant, at least when you begin. The testing of indicators is endless....simply look at Think or Swim and load indicators - you'll be lost for years.
I was looking back at my Q1 trading results and then assessed a few items. One, I trade far too much. Too many ideas and not enough capital/risk on the best ideas. Second, I was cutting trades a bit early.
But today I was short Nasdaq futures for close to a $100 point trade and it was simple, smooth and effective.
The morning session today saw a $100 point plus decline which our rules based strategy allowed us to be short with. So we have to take into account situational awareness which this trade did considering the late day sell off yesterday. I i were to add any conventional indicators or technical analysis would this trade still work? Yes and no. First, indicators lag price. By the time the signal to short fired off on this then it was too late. Did I use support/resistance based concepts on this? Of course.
But the goal is low risk entries with high rewards and a $70-$100 point Nasdaq futures trading is no joke. Many traders will travel down the 'new trader path' and back test indicators and scenarios, it's one way to get to the pot of gold. Or, you can trade focusing on the reality of how markets work and how money is truly made and lost. This means understanding what it means to see supply and demand and to train yourself to understand that certain scenarios call for you to analyze quickly without the use of technical analysis or indicators.
I hope this helps.