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Becoming a Trading Expert: What Is the Best Trading Strategy?
November 3, 2021
As of November 2020, there are over 1.65 million active traders in North America with that number expected to gradually increase. If you are new to trading or figuring out how to get started, you’ll need a strategy.
With various types of trading strategies out there, it’s hard to pinpoint what works for each individual.
Learning the best trading strategy involves knowing the different types. Keep reading to find the right one for you.
News Trading Strategy
For some, the best trading strategy is a news trading strategy. This involves making trades based on market expectations and what is happening in the news.
News travels quickly these days which makes this strategy a little more difficult than you’d think. After news gets released, a trader will have to assess it immediately.
Figuring out if the news matches the market expectations is one of the fundamentals to making this strategy work. Sometimes market reactions and expectations are more important than news releases.
End-of-Day Trading Strategy
Another one of the best day trading strategies is the end-of-day trading strategy. Traders that work off of this strategy become active when it is clear that the price of a stock is going to close or settle.
This strategy requires a bit of studying. You’ll have to keep an eye on the price action especially compared to the day before. Based on the price action, a trader will determine how the price might move before the close of the market.
The end-of-day trading strategy comes with some overnight risk. If you place a stop-loss order, you mitigate this risk factor.
Swing Trading Strategy
The best stock trading strategy for those who enjoy researching is the swing trading strategy. Since you only research the market at opening and closing times with an end-of-day strategy, there is no comparison to the amount of research.
A swing trader trades on both sides of the movements in any financial market. They buy when they suspect the market is going to rise and sell before the market falls.
Because the market is so volatile, this is not the best strategy for beginner traders. You have to be very technical about your stocks with this strategy.
If you use this strategy, you’ll have more opportunities to trade. Plus, you can expand your trading portfolio to international markets at monexsecurities.com.au.
Trend Trading Strategy
The last of the types of trading strategies that we will cover is the trend trading strategy. This strategy is similar to news trading but is more technical.
You’ll have to determine trends and follow them, but be adaptable because trends can quickly change. If you want to use this strategy, consider a trend-following tool that can help you make decisions.
What Is the Best Trading Strategy for You?
After learning about some of the different trading strategies, you’ll have a better idea of which one is right for you. If you are a new trader, there are strategies better suited for you than others.
If you find that some of these strategies are hard to understand, it’s important to complete more research before risking your money on stocks. Finding the best trading strategy can take time.
For more financial advice, check out the other posts on our blog.