The Best Trading Strategies for 2020 | Trading 101 Guides
Now that you have decided to start trading, it is important to have a strategy or strict guidelines and rules you are going to follow. Rules are important when trading because they help the investor to follow their strategies, and removes the emotion from the process. Whether you have started trading or plan to start trading, you will soon understand that emotions will get in the way of rational investing, this is especially true when it is your own money.
Have a Trade Strategy
That is where having a trade strategy comes into play. Whether you decide to be an active trader making multiple trades a week, or maybe a long term investor who wishes to buy and hold? Having a strategy will help you plan your entry and exits for a security whether you trade stocks or ETFs. Let us take a look at a few strategies here. One potential trading strategy is momentum trading. If the securities price is increasing then the investor would buy to capture the upward momentum. The investor would decide their entry and exit prices which become guidelines for when to open and close their position. How you decide what the price points for entry and exit are another factor that should be built into your trading rules. Another common method is the scalping strategy, where the investor focuses on many small gains. These are only two of the many strategies available for investors.
In addition it is important to understand the time frame for your trades. Are they going to be short term: same day, weekly, monthly, or do you wish to value invest where you look for underpriced securities and hold for appreciate. Famous investor Warren Buffet follows this model, and he has done very well for himself over the years. Regardless of your trading strategy, it is important to have set your rules and follow it. If you are looking for additional learning material, then Trading Y Bolsa offers a wealth of learning material and courses, where any trader can become a better investor.
Test the Strategy
So now that you have your strategy, it is time to implement it. Before you go investing real money it is important to test the strategy using paper trades. This training method helps new traders practice and test their trade strategies without risking real money.
With paper trading you are performing the trades you would perform in the real market but instead on paper. You will write down your entry price, and when the strategy flags to sell, you will notate the exit price. This will allow the investor to refine and correct their trading strategy until they are confident enough to implement it with real money. If making the investment choices your self does not interest you, or you would rather not create your own strategy there are other options. NAGA offers an twist to the traditional investing style. They allow you to mimic other successful investors and follow their trades with your own. This method of investing eliminates the need to develop your own trading strategy. Regardless of how you decide to trade, you should develop a trading strategy and a set of rules that help guide your trading. The most successful traders have honed their strategies for years, and is the first step to becoming a successful trader.
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