Touch trading describes an approach where the trader gets into the market at the point of impact of live price with a location of interest – in many cases, horizontal support and resistance level. As noted below, there are multiple pros and cons to using this approach.
1. Getting In At the Source
Despite the guarantee that comes with market predictability as you await price action confirmation, a greater benefit comes with the ability to get in at the source. And it is noted as the most significant advantage of touch trading approach. The ability to get in at the source unlocks the door for an earlier entry and potentially a greater profit margin.
2. Extra Trade Setups
It should not surprise that touch trading bears more trading benefits than a conformist cautious method. Not using price action confirmations can eliminate the additional filters. Hence, whatever is left behind is a more elastic and adaptive trading strategy, generating more trading prospects.
Most investors can hardly alternate between a conventional and an aggressive trading method. Within this framework, it translates to touch trading not favoring every investor. Some investors favor piling a lot of odds in preference of a trading prospect as they can and cannot depend on hit-or-miss techniques, which depend on large sample sizes to showcase their value.
3. Tighter Trade Management
The concept behind touch trading is the ability to swiftly amend if you happen to swim against the market wave. This is logical since trading at the source enables an investor to reasonably expect the market to…