Dana Galante's Strategy: Sell What's Overpriced.
The foundation of a successful strategy is always the rule that one should never deviate from the chosen strategy.
This rule has enabled many investors to make fortunes without creating sophisticated scripts or trading robots.
Dana Galante is a prime example of this, and the trading method she developed is understandable to any beginner.
Yet, for many years, it has generated guaranteed profits for its author, benefiting not only Dana herself but also the investors in the investment fund she created.
Now let's talk about the strategy itself.
Its core principle is that it contradicts the established rule: buy in a rising market and sell in a falling one.
Most traders believe that you can earn more in a growing market, because there is nothing easier than investing in a growing asset.
But statistics show that few who profit from an uptrend maintain their profits when it reverses. Since the reversal is often swift, the stock price plummets, and traders simply don't have time to react.
Therefore, Dana Galante, on the contrary, prefers to find, during a rising market, shares of companies whose value is greatly inflated and does not correspond to either profits or the real value of their assets, that is, there is an overvaluation.
These are, so to speak, soap bubbles that may soon burst.
support and resistance lines also play an important role in this matter; they serve as a kind of reference point when opening or closing transactions.
That is, the essence of the method is as follows:
• First, a stock with an inflated price is found, 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 transaction is opened.
A signal to sell can also be a frequent change in top management of the company on whose shares the bet is made, since a change in management can indicate internal problems.
In addition, significant rollbacks should be observed for the selected asset 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 to close.
According to the author of the strategy, selling is less risky, since it often falls rapidly than soars and there is time to make decisions.
The described trading option is quite common; many traders sell overvalued shares for years while others are still buying them.
You will find other strategies in the section - http://time-forex.com/strategy
