Trading strategies advantages include being able to monitor what is happening on different markets and when trade setups are potentially coming in. For example, sometimes simply watching too many markets can be overwhelming and the trader ends up missing all the good trade setups. However, if you are using a strategy to identify the entry, then it can notify you immediately that a trade setup is occurring.
Trading Strategies Advantages
For example, on the EURUSD forex chart below, there are 4 trade setups.
- Point A — ADX magenta peak (the yellow line identifies the point in price where the peak came in) is forming and this will send price back to the ATR stop (plus sign on the chart). However, you would have to sitting at the computer to know the trade was coming in, plus watching that particular chart.
- Point B – The ATR is flipped but the white congestion dot holds price up. The dot was plotted because there was not enough momentum in the flipping of the ATR. This indicates price will go back up.
- Point C – One of my favorite entries because price is at the ATR and this is the lowest point of risk on any trade. Again, you have to be at the computer and actually notice that the price bar has turned white.
- Point D – Back to the ADX magenta peak trade. The ADX peak identifies that price will go down to the ATR (the yellow line identifies the point in price where the peak came in).
While I don’t agree with simply automating strategies, I do believe trading strategies offer advantages like receiving notifications via my smart phone, identify potential entries on higher timeframes that I can then time with a lower timeframe, and the ability to monitor multiple markets without worrying about missing a trade. Trading Strategies advantages can be utilized by both intraday and longer term traders — even allowing traders not to be tied to their monitors all day.
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