How to choose right time to open a position?

The key to an investment strategy's success is choosing the right time to enter the market.

Most people think that the basic purpose of entering the market is to improve your timing in the market, thus increasing the reliability of the system. Most people who design trading systems just want to find a "good" market signal. In fact, the direction of the transaction is only one part of the entire transaction, and more importantly, to find an effective opportunity to enter the market.

1. channel breakthrough

As a trend tracker, assuming that your goal is never to miss any big fluctuations in the market, what kind of market signal can you use? The usual answer to this question is a market entry signal for a “channel breakthrough”. Basically, you are either entering the high end of the bulls in the market for nearly X days, or entering the lows of the shorts near X days.

2. based on the visual entry of the chart

Many experts do not have an exact market entry signal. Instead, they visually observe some charts and act on their intuition.

Many people take the visual interpretation of the chart a step further. For example, the beauty of technical analysis is to focus on many types of market models formed by the market. The chart patterns include gaps, peaks, key callback days, advancement days, operating days, internal days, and large fluctuation days. These patterns are generally used as short-term trading signals.

3. Volatility breakthrough

A breakthrough in volatility essentially refers to a sudden, drastic change in the price as it moves in a particular direction. Assuming that the average real price range is three points, we may define a change of 0.8 times the average real price range (relative to the previous closing) as a volatility breakout, which is 2.4 points. . Suppose today's closing price is 35 points, plus the volatility breakout is a 2.4 point change after the close. Either rise or fall. If the price rises to 37.4, then you have an upward volatility breakout and you want to buy. And if the price falls to 32.6, then you have a downward volatility breakthrough and you want to leave the market.