Trading has never been easier to get into than it is now, but that doesn’t mean that trading is inherently easy. On the contrary – you’ll need a good trading strategy to guarantee stable profits long-term. If you’re not sure which one to follow, check out these 7 Trading Strategies that every trader should know!
1. Don’t underestimate good research
Reading daily news might not sound like it has much to do with trading, but news trading is a valid and popular trading strategy. Try to assess the news right after it’s released and stay on top of the current events – they might get you a much better insight into how the prices will fluctuate, giving you a heads up on what new positions to open and which ones to close to avoid losses.
2. Diversify, diversify, diversify!
What’s the #1 rule of trading? Never put all your eggs in one basket, or in this case, never put all your funds in one asset. If you’re already investing in stocks or commodities, try to branch into forex. FX liquidity makes trading forex easy and quick, since most currency pairs can be bought and sold without making a big impact on their exchange rates.
3. Don’t risk all your capital on a single trade
A good capital assessment is necessary to start trading without the fear of losing everything. Most traders, or at least those who trade carefully, don’t risk more than 2% of their funds per trade. This way, you minimize your losses even if a position you’ve opened goes south – you’ll only lose a small portion of your funds, with other successful trades making up for this one loss.
4. Try range trading
Range trading is a trading strategy in which you try to make the most of a range-bound market, or a market in which fluctuations both up and down remain in a relatively small range. By closely inspecting such a market, you can try to make up patterns which, together with good research, can tell you when a given asset will rise or fall.
5. If you have the time, try day trading…
If you’re prepared to spend most of your day on active trading, day trading might be just for you. Prices don’t fluctuate only between days – they do the same in-between opening and closing hours of each market as well. With day trading, you don’t usually leave positions overnight, and instead make the most on intraday fluctuations to make profit.