TRADING STRATEGIES
FIND WHAT WORKS FOR YOU
Even experienced traders don't trade all types of trades. They find what works for them and stick with that. To be successful you have to do the same thing. Review the trading types listed and find a type of trade that fits who you are.
Buy and hold is the only guaranteed winner. You just have to hold long enough. Most traders reading this are looking for the larger returns of day trading. But Warren Buffett proved one can make billions with buy and hold.
Day traders never use fundamentals, but great investors like Graham and Buffett have proven fundamental trading will work. Fundamental traders look for investments based on a discrepancy between intrinsic value of a company and stock price. They analyze financial statements, and assess "book value" and their approach is always longer term, expecting that stock price will eventually reflect true company value.
Trend following works in any time frame. This includes day trading. If you only trade with the trend on clearly trending days, you will make a lot of money. The key is to recognize the trend as early as possible, and to enter early and add to your trade.
Mark Cook was a firm believer in the tick trade. He won the US investment championship in 92 with 563% profit. This performance made Jack Schwager include him in his book on stock market wizards. Mark taught that high tick levels were a contrary indicator, and price would short term, fall.
Mark has passed away. I knew him and traded with him one week on his farm in Ohio. He was a good man, and extremely disciplined trader who taught himself everything.
Scalp trades are quick in and out trades based on understanding the predictability of very short term price movements. Scalp Traders follow rigorous rules and are in and out of markets in seconds. Typically they base their decisions on levels, price action on short term charts, market movement at resistance, momentum, new highs and low, etc. Though the in and and out process may limit risk, it is more stressful than some other methods of trading.
Ali Moin-Afshari is a professional trader and co-founder of Quant systems. He is an expert scalper and teaches this methodology.
Overnight markets often create highs and lows that the next day's market seeks out and will test. Price may be rejected, or may stall at these levels only to go higher.
Balance is common in all markets and is described as a trading range. Price may stay in these ranges for some time, but eventually will be able to break out. These breaks can be trending opportunities.
Price often remains in a range, both short and longer term. These are areas that bulls and bears agree show value. Because of this, price may repeatedly revert to these areas, providing trading opportunities. Market profile can clearly delineate these areas, as well as areas of greatest value. Understanding this charting method can lead to trade recognition.
Chart above from WINDOTRADER software. This company is owned by Terry Lieberman, one of the "good guys" in the business. www.windotrader.com
Moving averages represent average price (fair price) over time. When price reaches these levels, traders may see this as an opportunity to get in a trade at a value level. Typical moving averages are 9 and 20 periods.
News moves price quickly. This can lead to opportunity, as price goes too high, or too low. Typically the first bar is a huge outside bar, followed by an inside bar. How price reacts from here can lead to good trades.
Price action is based on the idea that each bar can tell the trader something, then making decisions after each bar close. Most often managed on a 5 minute chart, Price action can be used on any timeframe. In the picture above, the appearance of these bars varies. That appearance, along with the context of the day and time period, gives information on what may be expected to come next.
Some traders use indicators for trade entry and exit. There are many with the most simple being moving averages. Others include RSI, MACD, Volume profiles like OBV, stochastics, Bollinger bands and many, many, more.
Momentum traders finds stocks with high volatility, and then get "on board" by buying strong price movement up or selling strong downward movement. The opposite of "buy low sell high", this is nonetheless a common approach that can make a lot of money when used properly.
Every trader knows about "trading the trend", but trading major trend reversals are a good strategy. The key is to wait for a strong trend-line break, then a further test of the extreme, and then strong reversal momentum.
This will work! Why? Because most breakouts fail. Markets tend to do what they have been doing. This means stay in trading ranges and reject breakouts. With proper trade management this can be profitable.
Swing trading is simply entering a trade, then holding it for a prolonged duration. Swing trading is fun. Nothing is more pleasurable than seeing your trade work and continue to work most of the day. Swing trades can provide much more profit to winners, than your losses on losers. The key is trade management.
Automated trading is something Wall Street Firms do this all day, everyday. Firms pay huge sums to rent space as close to the exchanges as possible, to improve their entry price. But any trader can set up automation and make the right trades. The key is having the proper algorithm.
Not aware of turtle trading? Google Richard Dennis. Based on following specific rules, and taking all trades, the turtle traders made huge money by following trends. With most of the money made over only a few trades, this is still used today.
HOW IT WORKS
3 SIMPLE STEPS: EASY AND FAST.
1
Hit the green button and get started
2
take our 2 week trader trial and see our process
3
Join us, follow our trades, and start making money
TRADER FEEDBACK
Real reviews from real traders!
I've always been interested in trading but have found it so difficult to learn. Now, through the right trade, I am seeing my mistakes and getting closer and closer to success.
Dillon
I love trading, but found myself losing money weekly. This guidance has helped me understand why and brought me closer to success.
COLE
Russell is clearly dedicated to trading. He has walked the path we are all on, made mistakes, and learned from them. His guidance has been incredibly helpful.
Herbert
