The Influence of a Trade Strategy
As the founder of Rich Picks Daily and a seasoned trader myself, I keep stressing the fact that until you have a STRONG trade strategy in place, you are only a gambler masquerading as a “trader.” In real life, there’s a great example of this — in particular, of not panicking and staying calm.
The stock DryShips, Inc. (DRYS) is the company whose shares are being discussed. In order to avoid any misunderstanding, I would want to state unequivocally that I am not in any way advocating that a novice trader should even try to trade these kinds of equities. The trader in this case study put a lot of effort studying how to do things correctly.
The story of this stock (DRYS) is rather unique as its value plummeted from $63.81 to $52.72 dollars in under 2 minutes.
The trader in focus kept his eyes peeled and discovered not cause for concern, but rather cause for celebration because he spotted an opportunity. This is where the significant difference lies between amateurs and pros.
During a time when everyone else was fleeing for their lives, the trader in focus was happily “buying the dip” while maintaining a cool and collected demeanor. His intention was never to trade just because the market was sinking. Sure, this was a part of it, but there were many other factors involved as well. (Do not, under any circumstances, start purchasing any stock that is dropping.
Some unlucky people kept selling. The price bottomed out and then shot back up to $63.84 in less than 10 minutes.
Upon completion of all of the necessary paperwork, the trader in focus realized a profit of $3,301.06… for just 10 minutes of “effort.”
He did return for a couple of more transactions, netting him profits of $538.20 and $189.58, respectively, but the major win came straight out of the starting gate.
The ability to create trading strategies that enable you to take advantage of chances while others are losing their composure is what really gives you a competitive edge over all the amateurs in the market.
I hope that this case study has inspired and encouraged you to become more realistic about the markets and to see that large profits are achievable; but, you must have something in which you can place your trust.