Even traders that are successful don’t change styles of trading as the conditions of the market change; they find a pattern that usually brings success and they stick with that pattern. When times occur when they lose because their style isn’t market compatible, they simply feel that those are the breaks that happen and just accept the loss. They have the idea that their stock trading strategy all possibly trade styles, but it’s not the case .
If traders are able to figure out the market state, that is, the type of trading going on now and the type of trading expected , they can considerably improve their returns . This is because when congestion trading no one applies the techniques of trend trading .
Some times the market state can be ambiguous. There wouldn’t be a market if things always were clear , since traders wouldn’t have different opinions , and trading in the same direction would be done by everyone all the time.
One such ambiguous state is when a trend seems to be out of energy and ready to change , and momentum indicators roll and look like they’ll be going from trend to congestion entrance. But the signals are not clear enough for the trader to go whole hog and initiate a large position .
When this occurs a trader can use pinging . Pinging is an attempt to hedge your bet a bit . The anticipated turn is where they place their single direction trades , but they don’t hold them too long , and when lower time period support appears they get out . At turning points the market frequently manifests “pumping” action , with swings in both directions that are volatile and large as traders of differing opinions around the world take positions against each other . Repeated multiple positions can be taken if a trader is pinging as the market moves from resistance to support and back again . Instead of riding the market both ways, and rather than placing a large bet on the anticipated new direction and holding on for dear life , it is as if stock trading strategy to the trader that he could “ping” the market , taking smaller positions only in one direction , and being willing to quickly and early cover when short term support is reached by the price.
Great profits can be enjoyed when pinging and it has the trader closely in contact with the market as the battle between shorts and longs go forward . Traders will be protected from a too early by pinging, even in a confusing market will allow profits to be brought in when attempting to end a trend may fail and the new direction is not certain. Pinging lets traders keep themselves in a position so that when the new trend does settle in and become well established , he or she is already aboard . When seen correctly , stock trading strategy pinging as one method of entering the market when a trader isn’t totally sure about the next direction of the market .