Dana Galante's strategy - Sell what is too expensive.
The basis of a successful strategy is always the rule that you should never deviate from the chosen strategy.
This rule has allowed many investors to make fortunes without creating sophisticated scripts and trading robots.
An excellent example of confirmation of such words is Dana Galante, and the trading option she developed will be understandable to any beginner.
But at the same time, for many years it brings guaranteed profit to its author, and the profit is received not only by Dana herself, but also by the investors of the investment fund she created.
Now let's talk about the strategy itself.
Its main principle is that it contradicts the established rule - Buy in a rising market and sell in a falling one.
According to most traders, you can earn more on a growing market, because there is nothing easier than investing money in a growing asset.
But as statistics show, rarely does anyone who made money on an uptrend retain their profit when it reverses. Since in most cases the reversal is rapid, the stock price falls at a tremendous speed, and traders simply do not have time to react.
Therefore, Dana Galante, on the contrary, prefers to find, in a growing market, shares of companies whose value is greatly inflated and does not correspond to profit or the real value of its assets, that is, there is an inflated capitalization.
These are, so to speak, soap bubbles that may soon burst.
resistance lines play an important role in this matter they are unique guidelines when opening or closing transactions.
That is, the essence of the method is as follows:
• First, there is a stock with an inflated price, which is overvalued and the profit for which does not meet the expectations of investors.
Then it is checked how close it is to the resistance line and only then a sell trade is opened. A signal to sell can also be the frequent change of top managers of the company whose shares are being bet on, since a change in management may indicate internal problems.
In addition, the selected asset should experience significant pullbacks from time to time; they indicate the weakness of the stock.
• After the price drops to the support line, the transaction is closed.
Optimistic news can also serve as a signal for closure. According to the author of the strategy, trading for sale is less risky, since it more often falls rapidly than takes off and there is time to make decisions.
The trading pattern outlined is quite common; many traders have been selling overpriced stocks for years while others are still buying them.
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