No matter whether you are a novice or an expert, one of these 5 effective tradin
2024-08-18
Every trader who achieves stable profits has a set of strategies that he or she follows. Never believe those who say they trade purely on "intuition." Many experienced traders have developed their own strategies based on a combination of technical or fundamental factors, which is also the reason they go further.
Today, the editor will introduce five trading strategies to you. Whether you are a trading novice or an expert, there is always one that suits you.
1. Price Action Method: Utilizing Support/Resistance Zones
You can choose to buy or sell, to be long or short. However, some financial derivatives traders can trade by analyzing the behavior of longs and shorts. This is price action trading, which occurs without using any indicators.
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When choosing this method, you must analyze the market behavior of the longs and shorts. If your analysis indicates that the longs control the market, then buy (long order). If the shorts control the market, then sell (short).
Advantages:
- If you need to learn trading without using indicators and "feel" the market, price action trading is the best way to do it;
- It is a great method for traders who appreciate time;Translate the following passage into English:
It is simpler than most strategies.
Disadvantages:
- Professional guidance must be provided;
- Appropriate knowledge is required to succeed;
- It is considered an advanced form of trading among beginners.
II. Position Trading: Suitable for those who can wait
If you are planning to stick to long-term trading, then this method will benefit you. Position traders usually trade within daily or even weekly timeframes. Typically, followers of this method rely on NFP, retail sales, GDP, and fundamental analysis, applying technical analysis only when you enter the market.
Advantages:
- It is not time-consuming;Translate the following text into English:
* Less stress;
* The chance of making a profit is 1-5.
Disadvantages:
* Requires the use of fundamental analysis - focusing on news and events;
* The stop-loss range is wide, so you need a large amount of capital;
* Low trading volume, so the profits are relatively small;
*
III. Swing Trading: The Art of Holding Trades
This mid-term method allows traders to keep orders for weeks and days, and people trade in the 1-hour or 4-hour time frame. Swing traders need to capture a "single move" called a swing. Swing traders must learn the technical concepts of resistance and support, moving averages, and candlestick patterns.
Advantages:Here is the translation of the provided text into English:
I. Having a Full-Time Job and Trading:
- Can have a full-time job and trade at the same time;
- Can make profits annually;
Disadvantages:
- The big trend will pass by.
- There may be overnight risks;
II. Day Trading: When in Need of Quick Money
This short-term method is very fast, with people trading in 5-minute or 15-minute time frames. The main problem for day traders is intraday volatility. Traders should trade during the most volatile periods of the chosen instrument. Fundamental analysis and long-term trends are irrelevant. Traders only define the deviations of the day (long/short positions) and trade the entire trading session in this manner.
Advantages:
- It is easy to make money on most days;Translation of the provided text into English:
Advantages:
- Since all trades are closed within a single day, there is no overnight risk.
Disadvantages:
- The pressure is intense, requiring constant attention to the market.
- Significant slippage when trading can lead to substantial losses.
- The opportunity cost is enormous.
V. Transition Method: Trading within shorter time frames
When the target price rises, traders enter the financial derivatives market at a lower time frame, or use a stop loss at a higher time frame, necessitating an exit at a higher time frame.
Advantages:
- The opportunity to make profits (with a ratio of 1 to 10);When trading within a relatively short period of time, the risk of losses is lower;
Disadvantages:
- Only a small number of traders can become regular winners;
- Traders must fully understand the rules of many time frames;
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