Trading is a very new form of income so far this year, and many have already entered its universe hoping to become great traders, but with so many options and ways of working the same, they wonder
What are the best strategies if I don’t know any?
For this we show them to you so you can choose the one that suits you best.
Top 5 trading strategies
1 – Technical tools
One of the most effective strategies to start trading is using the tools that it provides regardless of the page you use. This technical analysis is carried out by means of graphs taking into account the premise of one of the postulates of the Dow theory, which is that the market discounts everything.
4 Any shape or factor that impacts supply or demand will cause the price to change, so analysts use charts to predict this.
These charts are composed of axes that convey time and price, which is why price action appears on the charts in ways that you interpret regardless of the trading style you take, but of course, keep in mind that It all starts with the study of the charts and how they take action on prices.
2 – Fundamental tools
Unlike the previous tool that is based on a technical analysis, with the fundamental analyzes you manage to concentrate the forces on what influences a demand and supply as the main engines that move a price .
Fundamental analysts have a mantra that markets can incorrectly value a financial instrument in a short period of time, so it is always “corrected” in the end.
Most of the fundamental factors always remain categorized within a “who knows” so it is not a widely used strategy within some more profitable systems such as Forex.
With this in mind, many fundamental traders use their abilities to develop valid methods that allow them to work the market properly, in order to generate the predicted income and predictions. One of these is News Scalping .
3 – Supports and resistors
Supports and resistances are also important elements when starting to make a good strategy in the world of trading.
These, in a simple way, allow to determine the support and resistance levels that represent the current market trend bouncing off previous highs or lows.
Support is a trend that must rise from a previous low, while resistance is a market trend that tends to fall from previous highs.
This happens because those who participate in the market tend to prejudge current prices with respect to previous highs and lows.
If the market approaches recent lows, it will be easy for buyers to be attracted to what they see cheaper, but if it approaches recent highs, then sellers will have the attraction of seeing the expensive, or a good place to make sure of the benefits to be obtained.
That is why these highs and these lows are like that rod that measures the current prices that are being evaluated.
But within all this, there is always a predictive aspect that is done through support and resistance.
This happens when those who participate in the market foresee a reaction of a price at those levels and work accordingly.
As a result, the actions are obtained in a way that is expected.
However, it is important to analyze these 3 questions:
- Supports and resistances are not rules that cannot be violated, moreover, they are above all a consequence that can be demonstrated as a natural behavior of market participants.
- Trend monitoring systems are intended to benefit from those moments when support and resistance break.
- Trading strategies that are counter-trend tend to be the opposite of following the trend, so they seek to sell when there is a new high and buy when there is a new low.
4 – Trading FX
This trading strategy kicks in when a market breaks out of its range , causing it to move out of resistance in order to start a new trend.
This happens when support breaks and the market then moves to an entirely new low, where buyers expect the new lows to complement each other.
Also, there will be times when some desperate traders sell or are forced out of their position, this trend will continue until the last sale is exhausted, and buyers regain confidence in the prices that are achieved with the new low. .
In Forex , trend-following strategies are responsible for buying at the moment when the resistances break and selling just when the levels fall below the supports.
5 – Breakout
At other times the market tends to move between the support and resistance bands, which is known as consolidation.
A break in this will produce that when the market reaches the limits of consolidation, it will open new lows or highs.
Therefore, for this trend to occur it is necessary that a break occurs first, therefore, these breakouts are seen as an opportunity for potential signals of a new trend beginning.
The problem with this is that not all breakouts usually indicate that there is a new trend, moreover, in Forex it is common for such a simple strategy to consider certain risks since this way, losses can be minimized during the process of a false breakout.
So how can we determine when an idea of the type of trend is starting? Something that can help us is the time of the period that it has been in both the highest maximum and the lowest minimum.
Remember, Forex breakout strategies can be altered based on the fast or slow reaction of a trend formation .
Therefore, reacting more quickly will allow us to traverse a trend from a starting point, but may result in trends being contained in short periods.