Trading Styles.....Part 2

Aggressive strategies

The Aggressive trader might not wait for the signal's timing element to trigger. In the case of a Bias-up signal, the Aggressive trader would consider establishing a position upon S&Ps crossing the signal's price level - regardless of the time. And the Aggressive trader might choose to short (i.e. sell) upon S&Ps testing the Bias-up signal in anticipation of the signal holding through the appropriate timing window.

In the example below, S&Ps surge through the bias-up signal at the open. Aggressive traders would choose between acting on the strength when it appears, or establishing a long position upon a pullback the signal level. Both the initial break and pullback could be acted upon.

If the Aggressive trader chose to buy when S&Ps crossed above the Bias-up signal, then a decision must be made for determining the stop. The stop can be based on price by exiting the long position if S&Ps at any time were to fall back either under the Bias-up signal, or under an adjusted stop. Alternatively, the Aggressive trader that chose to buy early can wait for the No-bias signal to officially trigger, meaning that S&Ps had fallen back under the Bias-up signal and remained under it at the appropriate time.

Often, a confirmation price is identified as price action is developing ahead of the bias signal's official trigger time. An Aggressive trader that chose to sell when the Bias-up signal was being tested might consider that confirmation price as his short position's stop. But if the Bias-up signal is triggered, the holder of any short position should have already identified his stop price, or else simply cover (buy back) the short position when the Bias-up signal is triggered. If it was correct to sell into the Bias-up signal's test (which would be the case if S&Ps reversed down), then the Bias-up signal would be an appropriate stop.