What are the most effective TA strategies for trading during fiscal stimulus periods?

2 Swing Trading

Another effective TA strategy is swing trading, which means taking advantage of the short-term fluctuations of the price within a longer-term trend. Swing trading can be suitable for fiscal stimulus periods, as it can allow you to profit from the volatility and uncertainty that are often associated with the government interventions. To implement swing trading, you need to identify the support and resistance levels of the price, which are the areas where the price tends to bounce or reverse. You can use various indicators, such as Fibonacci retracements, pivot points, or Bollinger bands, to locate these levels. For example, you can use Fibonacci retracements to measure the percentage of the price movement from a swing high to a swing low, and find the potential support and resistance zones at the 23.6%, 38.2%, 50%, 61.8%, and 78.6% levels.

3 Breakout Trading

A third effective TA strategy is breakout trading, which means trading when the price moves beyond a certain level or range that has been holding it for a while. Breakout trading can be profitable during fiscal stimulus periods, as it can help you catch the new trends or movements that are triggered by the government announcements or expectations. To execute breakout trading, you need to identify the consolidation or congestion areas of the price, which are the ranges where the price moves sideways with no clear direction. You can use various techniques, such as horizontal lines, channels, or triangles, to draw these areas. For example, you can use horizontal lines to mark the upper and lower boundaries of the range, and trade when the price breaks above or below these lines with a strong volume.

4 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?