May 11, 2007 at 8:26 am | | Comments 0

Shifting Market Exposure

This market has made an incredible run, and we’re finally starting to see some profit-taking. However as traders, we sure don’t have to predict where things are headed as long as we let the charts be our guide. That’s great news if you’re not the owner of a crystal ball, and it also means our market exposure can shift naturally.

If you’re trading from chart patterns, your market exposure will shift naturally if the market trend begins to change. That’s a beautiful thing, because bullish patterns emerge during uptrends and bearish patterns will surface during downtrends. It means there’s no need to predict what’s going to happen next.

That’s exactly how we swing trade at By sticking with the best technical setups, we not only reduce our risk per trade but we also find that we’re naturally hedged at turning points and always trading in the direction of the prevailing trend.

Case in point: this week we closed out some very nice gains in long-sided trades like AKS and ONAV, and also added a little short exposure when another bearish pattern was confirmed. It’s interesting how just locating the high-quality setups and letting them confirm will shift exposure naturally when the market changes.

So remember, there’s no need to predict. There’s no need to be a rip-snorting bull or a growling bear. Just let the setups show you whether you should be long, short, or in cash!

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

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