Mechanical trading systems: essence and efficiency for stock trading
The investment market in Russia lags far behind other countries in terms of development. Stock trading here does not yield the expected returns and involves some risks. According to statistics, only 5% of investors make a profit in the first six months, while the rest suffer losses. And in most cases the reason for the failure is insufficient analysis of the situation and not a serious approach to the case. In this activity it is important to use special instruments, one of which is considered to be mechanical trading systems.
Working with stocks requires attention and careful analysis of a number of points. It is necessary to draw up an action plan, to record reporting, to study the market situation. Using mechanical trading systems or MTS, you can control the trading process and analyze your actions for further correction. Such an approach will allow increasing profits and minimizing expenses in the future. MTS gives an opportunity to receive income in the amount from 60 to 100% regardless of the market – side, growing or falling.
Mechanical trading systems is a list of rules and recommendations that regulate the processes of opening and closing positions in the market. Thanks to these tools it is possible to avoid most mistakes when trading shares.
MTS can be of two types – trend and counter-trend. The first provides income if there is a trend. And it is the trader’s duty to see it at the right moment and to hold the maximum period. However, trend systems have one nuance. In case of sideways market movement, unprofitable signals can be actively generated. At the same time, several successful deals in this approach bring a large profit, which will cover losses in loss-making trades. Counter-trend systems are used for the sideways market.
When applying MTS, the ratio of the number of profitable and loss-making transactions is taken into account, which is obtained by comparing the average profit to the average loss when analyzing one transaction. The system also generates the possible size of profit for a certain time.
Besides the correctly chosen instrument, one should also choose the market. The Russian segment does not provide much opportunities for business development. The only ones worth paying attention to are the shares of UES of Russia and Gazprom. However, the securities of the second option have low liquidity, so there is no reason to claim a successful outcome of trading.