Play Both Sides With a Bilateral Strategy

Market exposure is a direct bet on market direction for most traders, but, surprisingly, guessing which way a stock will move isn't required in order to turn consistent profits. In fact, many patterns and setups work equally well in both directions, and it's often a flip of the coin whether they eventually break out or break down.

You can manage this uncertainty by utilizing a bilateral trade strategy that enters a long or short position, depending on the direction in which the trend finally develops. Realistically, this approach doesn't work with all type of patterns, because the chosen play needs to show ease of movement in both directions, as well as clear entry points.

To build a bilateral strategy, you also need to overcome directional bias when looking at a price pattern. Although you see it in your mind as a long or a short, that's often a fabrication created by greed or fear associated with risk-taking. In truth, many trades work with this approach, as long as you let the market tell you which way to go. ...