Trading strategies
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A trading strategy will help you to avoid major losses and benefit from the right circumstances.
Strategies are divided by the time a position is kept open.
Short-term: Trades are open for a short time, from a few seconds to a week. Includes scalping and day trading.
Medium-term: Trades are open from a couple of weeks to several months.
Long-term: Trades are open for more than a year.
Short-term strategies include:
✓ Trading at support and resistance levels
✓ Trading on breakouts of support and resistance levels
✓ Search for patterns
✓ Arbitrage
✓ News trading
Medium-term strategies include:
✓ Trend trading
✓ Buying undervalued shares
Long-term strategies include:
✓ Buying dividend shares of major companies
✓ Portfolio strategy
Of course, this list is not complete. Traders rely on different parameters when choosing a strategy and many experienced traders invent their own strategies.
As for investing in stocks, you will develop your own strategy sooner or later. Here are some ideas to get you started on that.
✓ Take profit when the price has grown sufficiently, sell the initial amount and keep the remaining percentage or use it to buy shares of another company.
✓ If you have bought stocks and the price drops, keep holding. The company can grow at any time, and a temporary loss is no reason to be impulsive.
✓ It is important to have a balanced portfolio. Don't keep all your money in shares of one company and don’t invest in dangerous companies.
In a nutshell, just follow the laws of wealth, pay your taxes and manage your risks.
Learn more:
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• Insurance: is it so necessary?
• Do you manage your money or does money manage you?
• How to know your profit potential?
• How to make money on stocks?