A lot of stock traders will tell you that a stock trading strategy is very often said to be the same as a stock trading system that is designed to be used and traded in the stock market. For the technical stock trader, the technical approach to a stock trading strategy is based mainly on price action. Once the set of rules and guidelines that make the overall stock trading strategy have been identified and followed by a stock trader, the trader must remember to remain open-minded so that the trading strategy can be fine tuned and adjusted to new conditions in the stock market.
Stock traders who use a good solid stock trading strategy know and understand that money management is the absolute key to continued growth in their trading account. For this reason the money management component of a stock trading system has often been called “the golden rule to stock trading”.
Poor stock trading strategy behaviors are usually caused by uncontrolled emotional reactions, while others are just simply the result of bad stock trading habits. Your trading goal is to make your stock trading strategy systematic, logical and habitual at all times. By being completely aware of your trading and by continually working to improve your stock trading strategy, you will soon develop and find the set of behaviors that will make trading success a habit for you.
Stock screening is a basic stock trading strategy and tool that involves the trader screening the entire universe of securities for potentially favorable stocks for trading. While other stock traders look for stocks that are ready to breakout from a pullback.
A word about Market Equilibrium follows. It is said to be obtained when the market price of a stock or security represents the average intrinsic estimates of all traders and investors. While the term Market Efficiency means that the more efficient the market is, then the greater the degree that stock or security price reflect all the information available which may influence the price of the stock or security.
If your stock trading strategy is not suited to short-term market conditions; you should quickly adapt your strategy, and if necessary, do not trade. Short term trading combined with long term stock investing should be part of your trading plan if you want to build wealth while trading stocks.