Before jumping into the complex world of highly technical concepts, indicators, focus in the basic concepts of trading strategies. Many think that you need a complicated strategy to succeed, the secret is to have an effective way of trading.
Whatever strategy you choose, the following elements must be part of your strategy:
Money management - When you start trading, sit down and decide how much is okay for you to put in risk. Keep in mind that most successful traders will not put more than 2% of their capital on the line per trade. You should know that some losses in the beginning are normal until the wins start rolling in.
Time management - You need to monitor the markets continuously for trading opportunities. If you are dedicating one hour or two do not think that you will see huge profits.
Start small - Sticking around a stock that you have studied for long time and you know its behavior is a very smart move. It is better to get good at one and two and making money out of them instead of making no money on loads.
Education - Make sure you stay up to date with market news and all the necessary events that will impact your asset. Stay alert to check economic calendar, financial events around the globe, latest political events that might be happening and so on. Only this way you will be in touch with the information, so in touch with the money.
Consistency - It’s harder to manage your emotions when it’s been long day staring at the screen. Let math, logic and your strategy guide you, not nerves, fear, or greed.
Timing - The market will get volatile when it opens each day, so, hold back for the first 15 minutes, you’ve still got hours ahead.
COMPONENTS EVERY STRATEGY SHOULD HAVE
Whether you are using a robot, or you are a full-time beginner or advanced trader, you need to take into consideration three important components: volatility, liquidity and volume. If you are in the market to make profits on small price movements, choosing the right asset is vital. The following three elements will help you make the best decision:
Liquidity - This provides you to smoothly enter and exit trades at an attractive and stable price. Liquid commodity strategies, for example, will focus on gold, crude oil and natural gas.
Volatility - The greater the volatility, the greater profit or loss you may make.
Volume - This element will show you how often a certain asset has been traded during a set period. High volumes show you a high interest on this asset. An increase in volume is frequently an indicator a price jump either up or down, is fast approaching.
4 most famous strategies
• Scalping - very short-lived trades, possibly held just for just a few minutes.
• Day trading - the perfect forex trading strategies for beginners. Trades may last only a few hours.
• Swing trading - Positions held for several days, typically look at bars every half hour or hour.
• Positional trading - seeking to maximise profit from major shifts in prices.