Como se combate o populismo? "Com eleições", responde Fukuyama

[GAB]

Artigo interessante, por tal o puxei.

existe no blog(na minha assinatura-rodapé)um bom livro sobre esse autor: Alan Farley

[Ulisses Pereira]

"Momentum-Trading Rules to Live By"

By Alan Farley
Special to RealMoney.com
04/17/2003 11:56 AM EDT


"Recent bursts to the upside tell us momentum players are back and ready to roll the dice one more time. Why do I refer to this popular strategy as a form of gambling? Simply stated, that's exactly what it is for most traders who play in the market's fast lane.



Chasing higher, or lower, prices can be hazardous to your health, if you don't apply defensive rules and watch out for pitfalls associated with this trading style. Start with three vital disciplines that will break your destructive habits and get you on the road to profits.

First, abandon the adrenaline rush and forget the excitement. Your profits depend on detached and disciplined execution. Second, learn the cold hard numbers. See price movement in your head, so you can make spontaneous decisions when the time comes. Third, find confirmation for every trade. Use objective measurements to filter out unconscious bias, or you'll pay the price.

Here are 10 things you need to know before you play the momentum game.



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1. Volatility provides the raw material for momentum. Increasing volatility resolves momentum into directional movement over time. On a price chart, bar expansion out of a congestion pattern reflects these dynamics. It takes time for the trading crowd to notice this shift. Look for volume to spike once they see what's happening. This fuels the momentum engine and generates vertical movement. The mechanism then feeds on itself until a climax shuts it down.

2. Momentum profits require great skill and timing. Greed clouds risk awareness when a market starts to move. This forces ill-advised decisions because of the fear of missing out. This is the chasing psychology that usually precedes a reversal, and it's the primary reason that momentum traders lose money.

3. Price seeks equilibrium. When shock events destabilize a market, countertrend forces awaken to return price movement to a stable state. This forces a backward reaction to almost every forward impulse. New traders fail to anticipate this action-reaction cycle when they enter positions.

4. It's painful to ride a rally and then lose everything on the subsequent reaction. The typical momentum player doesn't plan for these countertrends, and usually exits in a panic, right after the selloff gathers steam. This can force an execution well below the intended exit price. Synchronize your entry and exit within this action-reaction cycle, or you'll lose a lot of money.

5. The momentum chase chews up trading accounts during choppy markets. Periods of directional movement last a relatively short time in relation to sideways congestion. Fall prey to wish fulfillment, and you'll see trends that don't exist. Get hooked on the excitement, and every wiggle will look like a breakout.

6. Countertrend reactions to momentum moves offer excellent opportunities. Learn to enter when the crowd is abandoning ship. Then get out after the rally, when others are panicking to get in.

7. Longevity requires trading skills in both trending and congested markets. Learn to shift from one strategy to the other as conditions change. In other words, adapt your tactics to the current market, rather than waiting for the environment to favor the momentum play.

8. Initial gains can be dramatic for new momentum traders. Beginners' luck and fearlessness combine to make those first few weeks or months very rewarding. But don't be fooled. Performance will deteriorate, and you'll lose everything unless you learn effective risk management.

9. Momentum trading requires solid tape-reading skills. Demand on the ticker reveals the inner workings of rapid price movement. Both minnows (small-lot traders) and whales (large-lot traders) must participate in a rally or it will fail. Watch the crowd's response to support numbers closely. If you can't see the urgency to get on board, perhaps it isn't there.

10. Momentum profits depend on the laws of physics. For example, an object in motion tends to remain in motion. This forces price to carry beyond reversal levels and through resistance. Keep in mind the star that burns brightest tends to burn out the quickest. Don't overstay your welcome when the market is on the move. "

(in www.realmoney.com)