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Stocks trading strategies for beginners

InvestorEducation / Learn to Trade Jan 08, 2021 - 01:39 PM GMT

By: Sumeet_Manhas

InvestorEducation

In the financial markets, when you have a good trading strategy, you always get by. If you're looking for the best stock trading strategies for beginners, you are in the right place. Below we give a thorough overview of trading strategies that will help you maximize your profits.


Day Trading Strategy

The day trading investment method is very popular and much appreciated by Forex traders since it does not require special knowledge or expertise.

What is a day trading strategy? It's about completing a large number of small trades in a single day and closing all positions before the end of the session. This investment strategy is, therefore, profitable thanks to the accumulation of large amounts of small gains.

For an effective day trading strategy, it is essential to use significant leverage: this requires knowing how to cut losses at the right time so that the total gains exceed that of the losses.

Swing Trading

Another investment strategy, ideal for novice traders, swing trading, does not require specific knowledge or in-depth technical analysis.

Its principle is very simple: you speculate only on trends.

It requires having identified, upstream, the most marked and secure trends on the market. It implies taking a position in the direction of this trend, and this as quickly as possible. The closing of positions should be done when the trend begins to weaken.

For effective swing trading, watch for support and resistance on asset prices.

Pyramiding

It is a strategy of maximizing your earnings, by strengthening your position, as long as the market proves you are right. A stop order protects gains as the movement progresses. It is then a matter of opening an additional position on each breakout of the latest high/low.

Scalping

The scalping strategy is very close to day trading based on the same general operation: to carry out very short transactions, in the direction of the trend, taking numerous but minimal gains.

Here, the amount of investment must be sufficient to ensure earnings. And here too, you have to use a significant leverage effect, and therefore act prudently, particularly by cutting your earnings at the right time.

Countertrend trading

As the name suggests, this trading refers to taking positions opposite to the trend of an asset. In general, it is often a question of catching movements of corrections. But with countertrend strategy we can take advantage of a trend reversal, and then capture a large part of the movement.

One trade per day per asset

This is a method that makes a lot of sense and is based on ​​making only one trade per day per asset. This trading strategy is suitable for traders doing swing trading or day trading, not for those practicing scalping.

It consists of analyzing all the products on which we are used to trading. After analysis, retain only 3. Study these three products again and give priority to only one. The next day chooses another product to trade and so on.

In conclusion

There are tons of ways to trade and earn on the stock market! You just have to choose yours. Your success in the stock market as a trader will significantly depend on the trading strategy you use. But, in practice, you will also need to mix different parameters to choose your trading strategy. The best trading strategies are the way of maximizing profits while minimizing the risks. Therefore,risk management is especially important for newbies. In principle, for novice traders, it's advisable to stick to straightforward strategies until they learn the ropes and get to know the market better. Anyway, whatever strategy you choose, you will need to have an approach based on patience and willingness to learn every step of the road.

By Sumeet Manhas

© 2020 Copyright Sumeet Manhas - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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