Best Trading Strategies for Ensuring Profit

Stock Trading is all about arriving at the right estimates and making nearly accurate speculations so that the trader is able to reap profits from his investments. Each trader has his own strategy which is based on the fundamental trading rules that have been theoretically established. Coming up with a suitable strategy requires good experience of managing the market scenarios and understanding the finer nuances of operating in the major trading markets.

FX trading is also a popular trading market and it poses even greater challenges as the rates of the foreign exchange fluctuate as per the dynamics of the global economic market. While coming up with a perfect strategy is next to impossible for traders, it is feasible to come up with really effective strategies that help minimize losses and provide greater chances for profit.

Penny Stock Trading Strategies:

Penny Stock Trading Strategies help to determine the best conditions for trading in penny stocks which are regular stocks that are trader are fairly low prices (approximately $5 or less per share). These stocks are usually not listed on any security exchange market even though there is permission to include them. Due to the nature of costs associated with these securities, small businesses involve themselves in their trade. The trading volume for these stocks are also low. Some may consider this as being quite a profitable opportunity in terms of stock trading, but there are considerable risks involved in the trade of penny stocks. It is therefore advised that their trading be taken with adequate caution as low costs of the shares should not cloud your judgement on selecting the best strategy to minimize losses.

Swing Trading Strategies:

This trading strategy is suitable for traders who are discretionary in their approach. The success of the trading activity in this strategy depends on the extent of discretion exercised by the trader. This strategy is based on the concept that holding tradable assets for a certain duration could reap profits due to the “swing” or change in the prices of the assets. Traders can keep this position for durations that are longer than day trading holding time and shorter than buy and hold investment positions that generally last a couple of years. When using this strategy, traders often utilize mathematical rules for estimating the best conditions for buying and selling. This also helps in eliminating the involvement of emotional biasness, subjectivity, and excessive manual efforts that are otherwise common in the swing trading approach. Risks in this strategy are mainly dependent on the nature and extent of market speculation involved.

FX Trading Strategies:

Forex trading strategies comprise a group of analytical rules and methods that are used for determining the best conditions for selling and / or buying currency pair at a specific time. These strategies are planned with the help of two specific aids, namely, news and current events that have an impact on foreign exchange rates and charting tools designed for technical analysis. Any trader who has dealt in foreign exchange is aware that with such high fluctuations and unstable dynamics of the currency market, there are only two ways of planning these strategies – speculation and hedging. Due to the nature of trading involved in this market, it is usually advised to make use of automated trading systems where traders can “teach” the system to monitor the market as per his own strategic methods and detect favourable trading conditions. The only alternative to this approach is to get a person to manually monitor the minute changes on the screen and make appropriate analyses and calculations based on the changes.

How Do You Choose the Best Day Trading Strategy?

The wealth of information available for you in order to learn how to day trade can be overwhelming. Speaking from experience, when I first started intraday trading I found it hard to see the wood for the trees. What with all the books, blogs, magazines, videos, seminars and all other media out there, it is not surprising that the majority of day traders fail to even break even. Statistics just released indicate that just over 97% of new day traders, who have been blinded by the potential wealth in the markets, fail to break even within a year. This is a huge statistic, and can be directly attributed to information overload. So how exactly does a trader choose the best day trading strategy?

Consider this – for every trade there are two opinions. If you buy stock then someone else has to sell it to you. Conversely, if you sell stock, somebody else has to enter the market in order to buy it from you. So who is correct? Clearly both traders cannot be right – they both have different strategies to help guide them into market entries and exits. Let us take this example further – let us assume you made the wrong decision and you are now at a loss. Exactly what signals did your day trading strategy tell you with which to buy this stock?

Believe it or not, there is a silver lining to the cloud when you make consistent losses. By simply keeping a day trading diary you have the opportunity to go back through the day and examine each of your trades. I attribute my success as a day trader purely down to the fact that I kept such a diary. During the heat of the day, at times it can be hard to take a step back and really analyze if you are making the right trading decisions – by keeping the diary, after the trading day has completed you can go back and check each of your trades. If it was a winning trade, what exactly made you take it? Establish this factor and multiply it in your strategy. More importantly, if you took a losing trade, what made you take it?

This last point is essential. Perhaps you are struggling to break even as a day trader? By evaluating your days trading decisions you then have the opportunity to correct your strategy going forwards. For example, did you take a losing trade by going long stock when the 10 day exponential moving average passed the 3 day? If so, maybe look at adding a buffer in your strategy – so under certain circumstances you go long only when price has passed 1% of the average.

Put simply, this is how to develop the best day trading strategy you can. Specifically, this is because you are developing a style of trading suited specifically for your chosen timeframes and personality. To reiterate this, it is pointless taking other traders strategies as maybe they trade at a slower or quicker pace than you are comfortable with. I appreciate this does sound like much trial and error – and it should! This is the way the best day traders in the world have molded how they trade.

In conclusion, the way in which to develop the best intraday trading strategy is to build your own one. And the way in which you do this is by examining and evaluating your previous winners and losers. Good luck and happy trading.

Profitable ETF Trading Strategies – Managing Your Fears

In this article I want to examine the usefulness of the metaphor of trading as combat to see what kinds of insights we can discover. I think you will find that it is a very useful metaphor provided you do not carry it too far.
 
Some of the most powerful aspects of combat are: fear, surprise, uncertainty, violence, consequences of failure, coordination, stress, leadership and emotional fatigue. Each of these aspects can easily be found inside the trading arena. I want to look more closely at fear in this article, because it is so powerful and pervasive.
 
Fear: it will freeze you in place when it’s time to act or it can prompt you to act when you shouldn’t. You will cloud your judgment so that you go left when you should have gone right and will cause you to question your own best judgment. Even the best laid plans, founded on the soundest principles of deliberate planning, may unravel when an unhealthy dose of fear is applied.

 
Facing fear, either directly or indirectly, is the first step in mastering this powerful emotion. The best way that I know to manage fear as a trader is to reduce your position size until you can trade at a level that allows you to operate with nervous energy but not outright fear.
 
No matter how effective and experienced you are, I think fear is an element of our trading all-time and one that we should therefore acknowledge and respect. It helps keep us humble and focused on our risk management.
 
Another useful technique for managing fear is to name it. By moving in the direction of the feeling of fear and putting a face and a name on it, you give yourself a handle with which to manage it delivered late.
 
By starting with the smaller aspects of the source of fear and learning to manage it carefully, you will soon desensitize yourself to its paralyzing aspects.
 
You will no longer feel the panic reaction when the environmental cues trigger the feeling because you will have the confidence to know that you can manage it.

 
Your effective risk management strategies will ensure that you don’t trade too large or too often. Your risk management will keep you from exploding and this can reduce an important source of your fears.
 
Trading with relaxed money, which is another way to say of being well capitalized and staying within your risk profile should also help reduce the source of some of your fears.
 
Finally, learning how to manage conditions of uncertainty will take away some of the nervousness associated with uncertainty.
 
Learning to recognize, acknowledge. manage and co-exist with fear will help you move beyond it to your next trading challenge.