Trading can be done in two flavors. One is shortly described as buy, sell or hold and the other as long or short.
The first version is what normally is done by traders. Find some investment target, think about the entry situation if that is what your trading system demands and put some cash at work. Perhaps generate, before doing so, some cash by selling another holding.
The second method targets only a single tradable object, takes a position in it, and then switches this position from long to short or the other way round.
Which one is better? The answer is as expected a bit more complex and there is no clear this or that one. The switching method is technically easier to implement. There is only one stock, currency or commodity needed and that’s it. The other extreme is the stock picker who has to monitor a whole stock market.
The advantage of the universal market hawk is that this system almost automatically does a selection. You concentrate on stocks in a current trend or with rising revenues, for instance. If you are a value investor with much time at your disposal you can try bottom fishing.
Important here is, that every trading system working with opening and closing a single position has some elements in it that actively find the next trading or investing chance. That is the keyword and the advantage of this method. The system centers around chances.
Switching the direction of the positional trade is a technical method suited for autotrading. Exactly this is the great plus of the long/short switcher. It is automatable. You can still spice this system up with replacing from time to time the stock or whatever gets traded with another vehicle.
Volatility is king with this method. It hasn’t to be a trend, a smoothly swinging stock is also good. Still, charts that are in a longer trend are often those that have more beautiful swings if they finally decide to end the trend. It is also possible that a large portion of the run gets reversed then.
Forex seems to be less suited for this kind of trading. Stock and commodity markets offer those trading chances that are in an abnormal expansion or implosion phase.
This switching system has a name, trend following, just with the addition of following the trend up and down or through swingy times. A simple way to accomplish this is to use a swing trading software that generates the switching signals.
With a software system that generates the switching signals the traders job is focused on finding trading candidates that have produced smooth trends in the younger history. A fundamental reason does not hurt. Keep your eyes on growth stocks that seem to be in an extraordinary phase or a commodity in a special economic situation.
Apart from selecting a wild trading horse, there is nothing else to do than watching, for instance, this autotrading short trend switcher to actually do the trading. Recommended for the beach trader.