In many commercials of trading platforms, you can see that beginners make a quick profit with minimal time expenditures at the initial stages of their path in trading. After a couple of weeks, they achieve permanent income. In reality, the situation looks a little different: most newbies play by intuition. This kind of trading leads to a problem when investor breaks the bank in the short term. It is necessary to study and properly apply trading strategies to avoid this. Only a straightforward, proven approach will allow traders to achieve their goals. Let us tell you what trading strategies for beginners exist and how to use them correctly. To practice them, check out the RoboMarkets platform!
Tips for Beginners
Everyone who wants to begin the trading path should understand that money must be invested safely and profitably. Use capital that can’t affect your personal and family budget. When finances are insufficient, no tactic or strategy will help increase them many times over a short period. On the other hand, psychological pressure from the risk will be at a maximum level because of the fear of losing everything. It’s easy to invest profitably with in-depth knowledge of analysis and the foreign exchange market basics, but starting your path with a lack of market awareness can result in problems.
Why Do You Need Trading Strategies?
Different techniques and methods of executing transactions are applied in the practice of trading exchange assets, be it gold or oil on commodity exchanges, stocks or bonds on the stock market, or even binary options trading. These strategies include different trading tools, but the main one is fundamental analysis. It is based on examining and forecasting all factors that can affect the price of an underlying asset, such as index futures, currency pairs, or CFD stocks.
In most cases, professionals prefer using graphical, indicator, and trend methods of trading strategies. But beginners can stop at the last point and understand a couple of basic approaches.
Trending Strategy: The Best for a Beginner Trader
One of the most straightforward strategies available even to market beginners is the trend trading strategy. Its essence is that the price of any asset, such as currency or stock, has only three movement patterns – growth, decline, and sideways movement (as professionals say – flat). Over these relatively short periods (as a rule, the trend movements amount to no more than 20% of the whole time interval), the price of an asset can increase by several percent or even tens of percent. In addition, using even a smooth upward movement of the cost of an asset during a trend period, it is possible to apply a trading strategy using small fluctuations in the price corridor.
As we have already mentioned above, the price of any asset has its upward or downward movements (so-called trends). This means that the price chart never goes along a straight line but fluctuates around a particular average value with a certain slope. Therefore, when oscillating (making trends), the price of the asset works in a price corridor. Using this feature of an investment, it is possible to earn from short-term fluctuations of the price within this corridor, which is most suitable for trading in any exchange market.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency.