How well do you know the difference between Selection and Elimination? Want to determine how one is advantageous over the other. Let’s explore Pro’s and Con’s of Selection Strategy and Elimination Strategy and which is a better option for you.
Be it in Investing or Trading one has an option to either choose selection or elimination.
THE PROCESS OF SELECTION
This is comparatively a short process and one can conclude very fast and easily. In the process of selection, you are not going to evaluate all the opportunities or even know that an opportunity existed until the time comes.
Pros of Selection
- Do not have to spend time daily in short listing the stock.
- Mostly used by Option Traders and Future Traders
- Not advantageous to implement in Investing.
- Saves Time
- Do not have to follow market news of all the underlying.
- Accustomed to Historical Volatility of the Stock.
Cons of Selection
- Most of them often miss a very good opportunity.
- Not much Idea of the remaining sectors.
- It can be difficult to change sector or stock altogether.
- Consolidation in the underlying of the selection could lead to lost opportunity.
THE BUILDING BLOCKS OF ELIMINATION PROCESS
Pros of Elimination Process
- Cover the entire gambit of Stock Market.
- Get the best opportunity of all.
- Speed is most important.
- This is the Best Option for Investing.
- Larger Scope of Opportunities.
- Can deploy huge capital in many small opportunities. Helps in creating a portfolio of stock trading and diversification of risk.
- Time Intensive
Cons of Elimination Process
- High Costs
- Knowledge of Technology
- There is no Guarantee
- Ever changing market dynamics and market volatility.
- Change in Technology.
- Rapidly evolving Concepts and Government Rules on the use of Technolgy for Stock Trading.
TWO SIDES OF THE SAME COIN
This article primary focus is to bring out to you the advantages and disadvantages of both processes.
There is no such this as a good process and a bad process.The one process which gets the results for you is the best process for you.
We always remember while discussing things that our motive is to make money. Not to be right all the time.
I am sure you would have something to say about this.
Let us know in Comments.