Developing Your Execution Skills
In this video, Roger Hawes, an Analyst from the Corellian Academy focuses on execution skills in trading, particularly the style of execution and the mindset that traders adopt when using order books, placing orders in the market, and executing trades at specific price levels.
Hawes discusses the importance of adaptability when trading and relates it to the ability to find a middle ground between passive and aggressive trading.
On the one hand, a passive trading style is similar to that of a market maker, where traders can wait for the market to come to them. They can place resting orders at levels they think are advantageous. For example, a trader can leave a bid order at a lower price if they expect the market to move in their favor. This method works well for less volatile markets or trending conditions, but it does not ensure immediate execution.
Moreover, traders should be able to recognize when the market dynamics shift and be prepared to act accordingly in order to protect their positions and take advantage of potential trading opportunities.
Aggressive trading, on the other hand, involves traders actively entering the market to execute trades at the current market levels with the goal of achieving certainty of execution and they are willing to pay the spread. This strategy can be beneficial for those traders requiring immediate execution while bearing the cost in the form of the spread.
In conclusion, the video emphasizes the importance of finding a balance between passive and aggressive trading styles and being adaptable to changing market conditions. This flexibility is vital for maximizing trading effectiveness and minimizing risks. In other words, traders should learn how to switch between passive and aggressive trading styles depending on the current market conditions.
