Trading Strategies for Beginners
Which Trading Strategies Should Newbies Use?
Beginner trading strategies usually involve simple indicators and trading approaches. In such a competitive environment like the currency exchange one, it is best if you start out with the basics of forex trading.
Day trading strategies are what newbies should use. Day trading refers to buying and selling financial instruments within the day or even multiple times until the end of the same day. Exploiting small price movements can be beneficial to beginner traders. However, if they don’t have a solid trading strategy in place, day trading can be dangerous. Additionally, it is vital that you find a forex broker that is specifically suited for the high volume of trades performed by day traders.
Top 5 Beginner Trading Strategies
Knowledge and Research
Day traders need to be up-to-date with the latest trends and financial news that affect the market. To achieve this, they need to create a list with the stocks they would like to trade and keep an eye on the relevant companies and markets. Traders should opt for reliable financial resources.
Set Limits & Realistic Goals
All traders should be aware of the amount of funds they can afford to lose. For example, if you have $20,000 in your trading account, and you are willing to lose up to 0.5%, then the maximum loss per trade should be $100. The trading strategy that is set doesn’t necessarily need to be successful though. Always be prepared to lose, even if you don’t.
Spend Time
During a trading session, beginners should focus on no more than 2 stocks for example. This way it will be easier for them to find new opportunities. Time is also important in terms of timing trades. Experienced traders can easily recognise when it is the proper time to profit off. Beginners, however, should focus on reading the market and do nothing during the first few minutes, as these are the most volatile ones.
Set Limit Orders
A market order executes the trade at the best price at the time but doesn’t guarantee the price. A limit order does exactly the opposite. This is helpful for newbies who want greater precision when buying and selling.
Stick to your Plan & Remain Calm
There will be times when the market goes through different fluctuations, which will test your nerves. In any case, you should be guided by logic and not emotion. Last but not least, you should always stick to your trading plan. After all, this is why you created it in advance.
Is Day Trading Difficult?
Day trading can be challenging due to a few basic reasons. First of all, you should always keep in mind that there are professional traders out there as well, who have access to advanced technology and material, and will possibly manage to recover no matter what. Also, you will need to remember that your profits will be reduced as you will need to pay some taxes. Finally, you may be asked to deal with psychological and emotional barriers, which more experienced traders deal with much more easily.
Final Conclusion
What Forexonline fx would suggest to beginner traders is, once they’ve mastered some or all of the above strategies, it will be time to move on to developing their own personal trading style and determining what their goals will be. Equally important is that they can make use of a combination of strategies if it suits their needs.
Day trading is difficult to manage and it is time-consuming. Traders need to be skilful and disciplined. Trial and error is the desired effect here, until you find your profitable strategy. With sufficient practice and consistent reflection on performance, you can greatly improve the chances of making more successful trades.