Even though Market Neutral Traders may not be picking a direction, we are dealing with price movement. Knowing what directional traders are thinking and where there are likely to be areas of high volatility can be extremely beneficial.
- Knowing the market conditions you’re entering into, in advance, can help you to modify your entry or avoid entering a trade that’s not likely to work out.
- Understanding technical analysis allows you to identify unfavorable shifts in the market environment thereby allowing you to make better decisions on when to adjust or exit.
- Knowing where support and resistance points are allows you to plan ahead and locate adjustment points away from those levels to avoid making decision points in areas where you are most likely to get rapid, unpredictable market movements and poor execution.
- Understanding where short term traders will buy or sell during market moves allows you to time adjustments for better execution prices.
For more information on how a market neutral income trader can benefit from technical analysis, click here to learn about our Trading Triangle Program!
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