There are a lot of trading strategies to make a profit. If you begin to study all of them your head will be spinning. For a successful trading you usually need to use two or three methods to have a regular profit and not to spend much time for trading. Online trading simplify your life and use of the easy and clear strategy makes it richer.
Here we will review the simplest strategies the beginner should know and more complicated high-risk methods allowing making a big profit. It will give you an opportunity to trade without studying lots of information and initiate a creation of your own successful strategy. All trading strategies are based on different signals depending on the chosen analysis methods. We will study three basic directions of the technical analysis:
1. Candlestick Analysis: This type of analysis studies the candlestick chart patterns. Each pattern signalizes about a tendency reverse or continuation. No need to learn all aspects of analysis as there is too much information online. It will be better to focus on the most often and recognized candlestick patterns. Candlestick analysis entails the Engulfing, the Squat, the Tweezers, and the Three Methods Strategies. The strategies are very effective and can be used to find trading signals.
2. Work with Strength Levels: Strength levels show the points where the price chart can stop or reverse. Use of them to identify the price levels for trading makes a trader’s life easier. Let us start our discussion with the levels of support and resistance. The support and resistance levels show historical levels, local minimums and maximums, trend and channel lines on the price chart. If the price has reached any such level it signalizes the price can stop or reverse here. There are two trading methods - breakout and reversal strategies. These signals can be strengthened or weakened by signals of the candlestick analysis and together they give us more chances to open a successful deal.
3. Computer Analysis: Computer analysis means the use of indicators to find an entry point. At present they use three indicators for analysis namely; the Moving Averages; the Bollinger Bands; and the Alligator. The price chart and moving average line give two types of trading signals: a tendency reversal which indicates when the price chart has crossed a moving average line, and a tendency continuation which indicates after the price has bounced from the moving average. To receive these signals there is a need to install the moving average indicator with a long period. The Bollinger bands are easy in use and can replace the trend channels as the indicator shows the most often range of price movement. The Alligator is useful as shows a beginning of the trend movement. You cannot use it as a basic indicator as it does not give the trading signals but you can use its lines as the levels of support and resistance. In general the indicators help to trade and allow analyzing a situation and taking a decision quickly. The indicators are good as a computer makes all calculations and gives ready trading signals. The only problem in using indicators is a necessity to set the indicator individually for each trading tool.
Besides, economic trading analysis should be understood. We all know that the market often reacts on the news publication and if the news is strong we can expect a strong price movement. The news trading strategy is risk enough but thanks to it you can make a good profit for a couple of minutes. But you can lose your assets for these few minutes if trading the news. It about the online trading – here everything is easier and less risky. Trade online our risks are limited by an amount of the deal and it is very good if our forecast has not been proved. But except the fixed losses we have the fixed profit.
This is very important for all traders who want to achieve stability in getting a profit. The best money management strategy is tracking your losses. At first you should define the loss limit level where you should stop and review the effectiveness of your current trading strategy.
Conclusion
We have discussed only the basic strategies of hundreds available trading strategies. Having studied and practiced them you can build a good foundation for your future successful trading strategy. You need to choose two-three tools for analysis and start earning. Detailed information about any trading method shall be discussed in our next article. Register Now, gain experience, and earning with us!
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