Trading Strategies

Having a trading strategy is crucial to trading success. Without a well-planned strategy, you're leaving yourself open to the whims of the market and your emotions.
Frequently Asked Questions
  • What are the different trading strategies?

    A trading strategy typically consists of three stages: planning, placing trades, and executing trades. There are lots of different approaches, including day trading, news trading, position trading, scalping trading, swing trading, and more.

  • What are the different types of traders?

    The types of traders are very tied to the various trading strategies. For example, fundamental traders focus on company-specific events to determine which stocks to buy and when. Noise traders buy and sell without fundamental data specific to a company. Sentiment traders seek out trends, and market timers try to guess which direction a security will move.  But arbitrage traders simultaneously purchase and sell assets in an effort to profit from price differences of identical or similar financial instruments.

  • Which trading strategy is best for beginners?

    As a beginner, focus on a maximum of one to two stocks during a session. Following the trends is probably among the easiest strategies for beginners. Anyone who follows the trend will buy when prices are rising or short sell when they drop. This is done on the assumption that prices that have been rising or falling steadily will continue to do so.

  • How do I create my own trading strategy?

    The first step into creating your own trading strategy is to determine what type of trader you are, your time frame of trading, and what products you will trade. It is best to see how an asset performed in the past by looking at historical data and charts around the time frame to be traded. Jot down your ideas and then start backtesting them.

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