Sabtu, 26 Februari 2011

4 seasons of stock market

market goes thru the following 4 seasons

(though not necessarily in a fixed order)

1. summer

(non-volatile, trending)

= indicators don't work; just go with the trend

2. winter

(non-volatile, non-trending)

= non-tradeable, holidays, stay away

3. autumn

(volatile, non-trending)

= technicals work best

4. spring

(volatile, trending)

= technicals work reasonably ok but not best; stressful times

--

it is dangerous and stressful to maintain same attitude and approach at all the times.

while it is not fixed which season will come when

but if traders are aware that different "seasons" exist, they will be flexible and adaptive

resulting into less stress and better results.

--

seasons may last from a few days to a few months or more!

not just that

the amazing thing is that

every trading season behaves like an independent mini-season

within the broader-outer season!!

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