How to trade?
There are many strategies for trading in the stock market (trading), but not all of them are suitable for beginners. Let's take a look at the main ones.
Scalping is a popular type of trading in which a trader makes a profit from any price movement. This is work on short timeframes (sometimes even 5 minutes or a minute). Suitable for those for whom trading is their main job (profession), it requires concentration and attention to detail.
Fundamental trading is a type of trading in which a trader trades in the medium term using fundamental analysis. He analyzes and predicts the market movement and the totality of indicators of securities issuers in the portfolio and, based on the conclusions received, makes transactions. This is a rather conservative trading method, it is quite suitable for beginners who start with fundamental analysis.
Technical trading - a trader trades on any timeframes based on technical analysis. Transactions are closed not on the basis of information about the market and the issuer, but on the basis of forecasts of price changes based on how they changed in similar external conditions. In essence, this is trading on trend analysis. Suitable for more experienced traders, but already at the training stage, it is worth starting to master the basics of technical analysis.
Another strategy suitable for beginners is trading in the medium term. The principles of operation are the same as for scalping, but profit or loss is fixed based on price movements in the medium term (an hour, several hours, a day). This time is enough to conduct a deep analysis and make a decision or decide on a strategy. Very stable and comfortable trading method.
High-frequency trading (if you have been on Habré for a long time, you probably read about it) is trading where traders are computers that perform millions of computational operations per second in order to get the maximum profit. It is interesting, promising, and even more relevant for programmers, but you need to know that it is not safe, requires knowledge and trading experience, and can also be attacked or blocked. It is not yet completely clear whether HF trading is the future of the entire global trading system, but it definitely has prospects.
Well, two types of trading are used exclusively by professionals and large institutional market participants.
Instant trading is trading due to price movements within different timeframes.
Trading on long-term timeframes is trading based on a set of integrated economic processes, external factors, market conditions and trends (see The News Spy software description on their website - it helps).
There is another trading strategy - repeating someone else's actions in your strategy - will not lead you to professionalism and will not allow you to build a competent relationship with the stock market. It is interesting and informative to read such stories, but building your trading solely on copying is a very bad idea.
You can always "laboratory" check the chosen strategy on the data of past periods and calculate what result you could get. This is additional "training" for your analytical skills.
So, you have become familiar with the types of trading and…
Further, I recommend that you read the blogs of large brokers (but remember that they are sometimes written not by professional financial copywriters and not experienced traders, but by marketers with a philological background, so maximum criticality!), watch educational materials (you can even basic university textbooks), go online - a course from well-known companies and to use a service like The News Spy. There is another way - to hire a stock exchange teacher from former traders or from a university, in a short time the basics will be explained to you in an accessible way. But feel free to ask about practical experience.
Throughout the training, you will need a demo account where you can operate with virtual money and not incur a real loss (however, not make a real profit). (By the way, please note that a demo account should not inspire you, because, firstly, it is greatly simplified in relation to the real situation, and secondly, it can motivate you and “play along”).
And when you are armed to the teeth with the basic theory and you know that Japanese candles are not sold on Aliexpress and do not fit Toyota and Honda, you can try to start working with real money on a brokerage account.
Source: The News Spy