The Market You Trade Is Not Random
So what are the other pieces of the puzzle?
According to my research, the market is in a cyclical state roughly 20% to 35% of the time. Logic indicates that you should have a trading strategy that can identify and trade this type of price action.
The stock market trends roughly 25% to 35% of the time also. So another trading strategy is required for taking advantage of this price action, too.
Then there is the time when the market is giving off mixed signals. This typically happens during a change in market conditions from an uptrend to a downtrend or from cyclical price action to a trending market.Understanding and identifying what I just talked about will greatly improve your trading, investing and reduce stress and emotional trading. In conclusion, it took me years of studying cycles to master identification and timing of trades based around them -- and to be honest I am still learning and improving this process. This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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