Focus on Market Timing of the Major Trends to Create Long Term Wealth
Taking a healthy position in the financial markets is a must for making profit in any market (Stocks, Future or FOREX) the idea is to find the perfect moment to sell your stocks high and purchase at low rates.
The selected time frame for positioning has a strong effect on the profit that a trader can earn suppose the trade wants to carry out a small number of moves. You can have day frame but then again there is less risk too. The trader can get more profit by positioning in several day frames, but risk is higher than the first method. In the third frame the higher risk is there but the trader can achieve maximum profit.
Now, we know that the selected time frame has a great effect on the risk as well as the amount of the profit. Not only have those but the Market Timing methods also behaved in the same manner. To get yourself a clear idea let’s look at the example of a position a trader can take given below.
- The position player is using a day time frame and waiting to post and he foresees a rise in the market and believes to maintain its momentum for several days. However the market timing method manipulated by the trader usually delays to give the signal around two to three days of the move. So that trader has to put his posting just below the new move. As the indicator is late there is an additional risk exposure and he must gain a higher amount of profit to stabilize the odds according to the winning ratio associated with the type of the transaction.
- If the trader had used a timing method, which gives the signal just after the move of the market, the time of risk exposure would have been less. So that he can obtain higher profit than the previous time. The trader can start posting at the very moment of the move of the market, if he uses a timing method of a very little lead.
Now you know the importance of Market Timing for getting a good profit.
It is important for us not to forget that good monetary and risk management also play a big role in determining the manner in which you will trade. Besides that these also determine the kind of risks that you should be willing to take. If you have a better Market Timing definitely you will be able to trade more confidently.
It is therefore important for you to try and make sure that you get as much information as you can about the market timing method of trading so that you are in a good position to trade with confidence. Market timing has been tipped as the best way of getting to trade without worrying about making huge losses. However, it is also important for you to try and exercise some level of caution while you are investing. This way you will be a prudent risk taker.