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Incorporating market risk into portfolio management (1 Viewer)

Lex

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I have had difficulty understanding how to incorporate market risk management into my CFD strategy. I have naturally held more shorts and sold off my long positions (swing trading) as the market goes up and bought more as it goes down. This has worked very well for me but only because of the ranging market. My ideas so far to mitigate this are :

1) Hold 1 unit of short ATLEAST per 3 units of long.
2) Trade futures concurrently to hedge any of this risk.
3) Analyse and have to adapt the strategy to each market situation. Would probably require some fundamental/technical economic forecasting?
4) Not bother worrying about what the market is doing because you are trading specific signals on specific stocks with specific parameters that follow the price, or in other words, what affects the price does not matter.

I get confused just thinking about it and think I should just not worry about it at all and just buy/sell stocks if i get good entries on signals regardless of direction. Any insights on this?
 
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I have had difficulty understanding how to incorporate market risk management into my CFD strategy. I have naturally held more shorts and sold off my long positions (swing trading) as the market goes up and bought more as it goes down. This has worked very well for me but only because of the ranging market. My ideas so far to mitigate this are :

1) Hold 1 unit of short ATLEAST per 3 units of long.
2) Trade futures concurrently to hedge any of this risk.
3) Analyse and have to adapt the strategy to each market situation. Would probably require some fundamental/technical economic forecasting?
4) Not bother worrying about what the market is doing because you are trading specific signals on specific stocks with specific parameters that follow the price, or in other words, what affects the price does not matter.

I get confused just thinking about it and think I should just not worry about it at all and just buy/sell stocks if i get good entries on signals regardless of direction. Any insights on this?


If you get confused thinking about your strategy, chances are your strategy just don't make sense or you haven't really thought carefully about what you're doing. Either way, going ahead with it anyway is a strategy for disaster.

What affects the price does matter.
Think about it.

If you don't know what affects the price, how do you take advantage of it when the market is wrong?
 

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