Does Research Help the Short-Term Trader?
Swing traders and day traders often spend a lot of time screening and looking through charts for stocks that are about to move. Whether it is looking for breakouts, ranges, chart patterns, indicator levels or current trends that are expected to continue or reverse, searching for the right set-up can take up a lot of time. For short term traders – and even long-term investors – there are no guarantees that this research will produce profitable results, or even profitable trades. After all, a stock that is expected to move may fail to move for several days, weeks or even months. Research often builds in a directional bias as well. This can mean that a trader will only trade in one direction based on his or her research, even when price indicates the opposite. While it is prudent to “trade with the trend,” only looking at one side of the market can lead to missed opportunities or, even worse, failure to realize when we are on the wrong side of a trade. Short-term traders have the ability
