Split trading is the origin of the method
The original hardcover edition of the Lin Investment Research Institute,“Excerpts from Market Techniques”is quoted here.
The waves of price in the market foretell the waves of economic conditions.
Therefore, at least for those who aim to profit through buying and selling like us, reading the economy is irrelevant. Also, since it is impossible to discern how various factors influencing prices interact, we should think directly about the price waves themselves and respond with trading techniques. The first step of that concrete method is split trading.
(From Excerpt 12, “Split Trading Is the Beginning of Techniques” in “Excerpts from Market Techniques”)
Day traders engage in ultra-short-term trading where both entry and exit are extremely singular events. But for ordinary investors who look to a certain period, there is some temporal leeway.
Therefore, there is no need to chase “one pinpoint target.”
“Now is the bottom!”
“This surge will likely mark the top.”
“It’s finally going up. When should you buy? Now.”
Well, this kind of thinking and bold action may seem like the essence of trading, but it’s a bit too much from movies or dramas.
There are situations when you should act decisively.
But in most cases, at least regarding the “entry” to gradually increase your position, acting bluntly isn’t very beneficial.
Buy a little, say “it might be good” and add a little more. As confidence gradually grows, buy a little more again... delay time until you align the number of shares you planned in advance.
Then,you approach the ideal form of an honest and calm “response.”.
Do not increase your position rashly.
Be ready to sell at any time,so that you can retreat quickly if you sense trouble.
People who are poisoned by movies or dramas may call it “petty,” but isn’t moving forward while considering the worst a reasonable attitude for a trader?
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