WHAT’S YOUR “EDGE”? CHART OR CHATTER..!!
What’s “Trading Edge”?
An approach that creates an advantage over other market players is called a “Trading Edge”. Anything which adds to the winning side of an equation or reduces mistakes builds a permeant edge. Don’t be discouraged if you haven’t found one yet, because the majority of traders don’t even have it either. It’s the main reason why only a few traders make profits and the rest struggle with poor or negative returns. There are many ways to build a trading edge but we’ll focus on two approaches, technical analysis (chart) and news (chatter) based trading.
Technical Analysis (chart) Based Trading
For any trader, a critical step in developing a trading edge is to choose an analysis method that evaluates charts and finds potential trade opportunities. Within technical analysis, it offers two different approaches, chart patterns, and indicators for evaluating any security or contract. Each offers its relative strengths and weaknesses. Although some trading experts are firm believers in one over the other, many traders do use a combination of these methods to create their customized trading strategy.
Chart patterns are a well-known shape that helps to identify in what direction price might go next, based on what they have done in the past. While Technical indicators are signals produced by the price, volume, and/or open interest of a security or contract used by traders who follow technical analysis. The expert technical analyst uses expensive software and checks hundreds of charts on daily basis to identify profitable opportunities. At Stratzy, we have created “Tech Buzz” to simplify technical analysis and identify profitable opportunities for our users. Unlike others, “Tech Buzz” equips our users with critical pattern recognition information for profitable trading opportunities in just a single click.
News (chatter) based trading
The day traders use a high amount of leverage and deploy trading strategies to earn gains on price movements during the day, as seen in liquid stocks. It is common to make money by stock movements that happen as an immediate reaction to the news. This news can be an announcement of sales numbers, acquisition, merger, order win, or results by corporates, etc. The markets react positively if news exceeds the expectations of market participants and vice versa.
Long back for traders, it was very challenging to get news on a timely basis and there were only a few people who had an edge over most as they were having access to important news before others. But in today’s time as the use of the internet has increased rapidly, it has posted newer challenges of information overload. Every hour thousands of news and articles are flashing over the internet and it has become very challenging for traders to make sense of all those bombardments of information. To make life easier for our users our quant team has developed a unique tool “Stratzy Social (stock buzz)” which is the first ever in the industry. This tool is specially designed for day traders so they can identify top stocks which is hot over the internet that too without spending much time.
Conclusion
Though both the Chart and Chatter method have their own pros and cons, still they play an important role in defining the success of traders. At Stratzy, users get to check Stock Buzz along with the momentum and the outlook of stocks in different time frames, which will help you formulate your trading strategy.
Traders can use a combination of both or either of these approaches depending on their trading style, to reduce mistakes and get the most out of their trades. Traders should also keep room for errors because not every news or every chart pattern leads to expected outcomes, but eventually it’ll help you evolve your thought process for better trading decisions.