How can you apply Ctabs for your trading decisions?
The simplest way is to follow the Ctabs action commentary as closely as possible. By doing so, your trading action will mimic the machine/program trading which is free of emotional and psychological impact. However, if you are not able or not willing to precisely follow the Ctabs action commentary, you can pick and choose when to follow.
For example, if Ctabs action commentary is "buy" and you see that the stock is in overbought territory, you may wish to ignore that Ctabs action commentary and wait for a better time to enter into a long position with that stock.
For another example, if Ctabs action commentary is "buy" and you anticipate news or events that could impact the stock's near-term price position, then you would hold off entering into a long position with that stock. Ctabs utilizes candlestick technical analysis without considering fundamental analysis, news, events or any other factor.
Although Ctabs is always in the money with either a long or short position, you are not compelled to do so. You may have registered accounts in which you are not able to partake in short selling. You may not be inclined to engage in short selling. For the case of only applying Ctabs for long positions, follow the buy and sell action commentary to hold long positions only. On the sell action, you just sell to close the long position without entering into a short position.
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