There are many different strategies when it comes to trading stocks, and there are even huge arguments over what the line between trading and investing is and how that affects strategies about trading stocks. While there are many different options, there are several that stand out as some of the best stock trading strategies out there.
The One Per Week Strategy
This is one of the best methodss for true beginners because it forces them to really focus in, study the markets, and examine every good and bad move they make during a week to figure out how they really are as a trader. Are they overly pessimistic and too cautious? Too optimistic and ignoring certain danger sign over and over? Do they really understand the technical charts they are looking at and trading off of, or trying to cheat with general trend lines?
All these questions can give a trader insight into how they trade, how they can adjust to trade better, and force them to slow down and get better since they're restricted to one stock per week. This can be one of the best stock trading strategies for mastering the basic (and even advanced) skills needed to consistently succeed.
Learn To Trade The Breakouts
This is one of the most common strategies when it comes to trading the stock market and it isn't hard to see why. Learning to read candlestick charts and the movement of high and low points can help to predict when a breakout happens, either up or down. By identifying potential breakouts before they happen or spotting them early at the beginning, a trader can jump in, see massive profitable movements in the market, and then jump out when the signs began to flatten out or even reverse.
This has long been one of the most popular models for trading stocks and because of the very high profit potential from a short time, will continue to be so.
Is Scalping The New Thing?
Scalping relies on being able to make tons of small profitable trades since no one trade is going to last more than minutes and the profit margins are going to be small. The winning comes from an overwhelming number of trades that are winners and just keep adding up over time. While this sounds good in theory, liquidity in the market is crucial for this to work which is why it is most often done in the Forex market. There are mixed reviews on how it works with stocks.
Looking At The Oracle
The nickname “The Oracle” might be a bit ostentatious, but it's hard to argue with the results that Warren Buffet has managed to accomplish over the years. While many traders will call this long-term investing as opposed to trading, it is a strategy that is true long game. Buffett looks for the most solid of companies in industries that can't or won't die, companies that have heavy cash and a huge customer base, and he invests heavily in their value over the long term. It's not sexy, but obviously he has made it work.