Four Roads to Wealth

Keeping your trading plan on track with Robert Miner. Inexperienced and unsuccessful traders often make the mistakes of over-complicating the trading process and/or of implementing some trading idea they read about or were taught without understanding the principle behind the information and how to apply the information in a practical manner. A practical trading strategy is one that any trader can execute with confidence in a timely manner.

There are four elements to a comprehensive and practical trading plan: momentum, pattern, price and time. Each element provides information that a trader can use to identify a high probability trade setup and to manage a trade. This article will briefly describe the four elements and their practical application. Our purpose is to get an overview of a practical trade plan and its execution.

Momentum
Trading in the momentum direction puts the odds of a successful trade firmly in the trader’s favour.

Almost all price momentum indicators represent the rate of change of a market trend. It makes little difference which momentum indicator is used, as most provide about the same amount of information. No momentum indicator is perfect. Momentum may temporarily diverge with price as a trend slows down or speeds up… read more  (http://www.ytemagazine.com/index.php/component/content/article/73-featured-articles/229-4-roads-to-wealth)