Commodity market trading - If the stock should demonstrate its ability of staying in that box, he would buy it, and place a stop-loss order to sell a few points below the buying price.
If the stock should rise, he would raise the stop-loss price. If it should fall through the stop-loss price, he would be automatically sold out. Mr. Darvas called his method "Techno-fundamentalism," but it is essentially a technical approach based on the idea that market is its own indicator. It is "fundamentalism" only in the sense that he used a daily market average of industrial stocks as a basic indicator of the stock market trend. Stock prices may indeed be determined by fundamental values in the long run, but he concerned himself only with what the market was doing at the moment.
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[tags]Commodity Market Trading[/tags]
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