The strategy that you employ with your share portfolio should be first and foremost dictated by the market conditions. If you are investing in the AIM Market that’s more like a shoot-out in the Wild West. Investing in the FTSE100 market is more like a leisurely walk in Hyde Park.
They are two completely different animals and need to be treated as such. How you prepare for each market should be different. How long you invest for, how many stocks you buy, how much profit you can expect, how much risk you should assume and so on – they are all questions that will be answered differently according to the prevailing market conditions.
In a chaotic market your strategy should be less structured and by definition more chaotic. That might mean jumping in and out of the market, scalping, having wider stop losses, letting profits run for bigger returns etc.
Even if you don’t have an exact plan, just knowing that you should have one, is a great help.
A lot of novice investors apply the same strategy for all different markets and that’s a big mistake. Because the nuance of each market is what gives you the opportunity to generate above average returns.