Tsunami Trading Robot: Mastering The Emotional Rollercoaster Of Day Trading

By Author: Samantha Dale
Total Articles: 610
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Many people begin day trading with glowing optimism. Armed with a fair amount of intelligence, they figure it can’t be too difficult to figure out which investments will be sound and profitable. A few bad trades later, people realize that outsmarting the market is far more difficult than it seems. They are quickly overwhelmed by the sheer volume of information needed to successfully analyze the movements of the market. Moreover, the results of their analysis can have vastly different implications depending on their stock trading software. The Tsubot, a stock trading robot, looks for significant movement of a stock’s price at a high volume. It helps identify changing trends early enough to make day trading far more rewarding than competing stock trading software.

At its core, momentum trading is simple enough: By identifying trends in the movement of a stock price a savvy trader can ride the waves of the market to make a profit. The difficulty lies in correctly identifying a trend, and catching it early enough to make a successful transaction. Many momentum trading systems use a fitted curve over a given time period. ...
... While such analysis can be beneficial, this strategy mistakenly assumes that past performance indicates future results. A fitted curve can be useful for helping traders identify a false reversal signal that would prompt them to exit the market prematurely, but it often fails to correctly interpret the trading volume information that can signal a change in the trend. The best day trader software accurately interprets the changes in a stock’s price, volume, and momentum to agilely adapt to market fluctuations.

Although momentum trading can be tremendously rewarding when done successfully, the inherent volatility of the market can make momentum trading a perilous pursuit. Momentum trading involves a substantial amount of risk, and not every trade will be a profitable one. For this reason, one of the most beneficial aspects of day trading software is the calculation of an effective stop-loss. When traders believe they have identified a profitable trend and buy into a position, the market can suddenly turn based on a number of unforeseen factors, sending the stock’s price in an undesirable direction. A stop-loss is a calculated risk to protect a trader from a potentially devastating loss. As a stock’s price edges closer to the stop-loss point, human nature kicks in. Traders convince themselves that if they just hold their position a bit longer, the price movement will reverse. This prompts investors to adjust the stop-loss continually lower, until a small financial setback becomes an overwhelming blow.

The emotional rollercoaster of momentum trading can also prevent them from maximizing their gains. When a stock is performing well, traders can be overcome with greed, prompting them to hold their position too long and miss their optimal exit point. Their emotions cause them to miss the signals indicating a change in the trend. A trading robot can correctly assess the information conveyed by the price, volume, and momentum of a stock, and is not subject to emotional irrationality. Using a stock trading robot like Tsubot, traders can maximize profits while minimizing losses, dramatically improving their results and their incomes.

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