Depending on the experience, a trader can adhere to someone else's strategy, develop his own or combine them with each other.
the best trading strategy is a approach which always ensure consistent level of profit. but any strategy not works for a long time.
I suggest breakout trading strategy for beginners. It is a price movement outside a defined support or resistance area, and it's one of the simplest forex trading styles for every beginner.
there is no trading strategy which work for a long itme , time to time we the traders have to update our strategy , otherwsie it will not work at all.
Buying and holding one share of QQQ is a good way to get your feet wet. At the same time, paper trade and learn your platform. Set up your hotkeys or hot buttons or macros or any other shortcuts available to you, so it doesn't take two minutes to enter or close a position. PRACTICE on your paper trading account, so you don't do exactly the wrong thing. For instance one platform might want you to set the trail amount of a trailing limit stop order with a positive number. Another platform might read that backwards, and set your stop above your buy-in order! Maybe your order entry by default is transmitted immediately when you do this or that or the other and you are expecting to be able to transmit or not transmit when you are ready. A wrong keypress or a slip of the mouse can cost you a big chunk of your account, so do your learning and make your beginner mistakes on paper. Now back to your share of QQQ. Let it ride for a while. That's real money and it's not a video game. QQQ is an ETF, or Exchange Traded Fund, based on the NASDAQ. Sort of like a mutual fund except you can trade shares of it like a stock, and you can trade it any time during the trading day. Your broker might require you to apply for special permission to trade ETFs and maybe even make you take a little quiz to make sure you aren't a complete blithering idiot trying to throw his life savings away. So just watch it for a few weeks. Notice how sometimes it makes nice upward or sad downward trends. Sometimes the trend is neither up nor down, just sideways. Spot the top and bottom reversals, where it seems as if the price has hit a ceiling or a floor and bounced the other way. Try to notice what is different about the reversal candle from all the others. Go ahead and draw lines. Draw lines along the top of the candle bodies, the bottom, the tips of the wicks, and straight lines that pass near or through a bunch of candles. It should become obvious before long that there is "sometimes" a method to the madness. I hope you understand at least the basics of candlestick charts. It''s "kinda" important. Now, the lines you drew dont really mean much. The thing is, other guys are drawing those same lines, and basing their trading decisions on where the price is relative to them, and which way they slant, upward or downward. They are also looking at recent highs or lows, and presuming that the stock or other instrument will move but not push through those price levels. This is called resistance (at the top) and support (at the bottom.) The lines are taken to be the boundaries of a trend. The price of a share or a contract is based only partly on actual value of the company or index or commodity. It is also based on the expectations of other traders. This is why trend following works. When it does, that is. Price has been going up steadily, hour by hour for three days? Peeps will assume it will continue to do so, and so they keep buying, price keeps going up, bringing in more sitters from the fence. Soon this may turn into a veritable feeding frenzy, and it is based only partly on actual fundamental factors, the rest being market enthusiasm. Then eventually there is a bobble in the market, some bit of bad news, or just a major player in that instrument decides to bail, to take his profit and run. He sells 100k shares. This sets the price down a couple of ticks when it was not expected. Except SOME guys did expect it, and they bail, too. Soon the rats are leaving the ship, and the trend has reversed. But the trend spends a lot more time trending than reversing. Charting platforms have what we call indicators. They do not predict. They INDICATE. They don't actually tell you what the stock or other instrument will do, price-wise. They tell you where the price has been, relative to where it is now. Do you believe in the trend? Okay, then buy into it or sell out of it. The indicator is a tool that can help give you some reference, and it tells you what many other traders are going to do. What those many traders do will greatly impact the price. A favorite indicator of mine is called the Bollinger Bands. This is just three lines that squiggle along on your chart. The center one sort of follows the price, This is a Moving Average of the price, Could be SMA, or Simple Moving Average. Could be EMA, or Exponential Moving average, which gives more weight to the most recent price. The average will be calculated from a certain number of time periods or candles. This period is usually adjustable and you can usually also switch between EMA and SMA, or even VWMA or Volume Weighted Moving Average, which adds the dimension of trading volume. But for now just accept the defaults and don't monkey with them. The top and bottom lines are a certain number of "Standard Deviations" above and below the moving average, That's complicated statistical talk, at least for unedjicated Rednecks like me, but you can study up on that some other time. Just accept it for now. If you put that Bollinger Bands indicator on your chart, You will notice some things pretty quickly. The chart can be a day chart, i.e. with each candle representing one whole day of price action, or one hour, or 5 minutes, or whatever. For now use the one hour time frame. The Bollinger Bands will adapt to the time frame you select. Notice that when the price is trending upward, first of all the moving average eventually starts following it up and eventually matching its rise. Second, while the price is above this moving average, the trend is moving strongly upward and vice versa. When the candles are touching or nearly touching the upper or lower lines, the trend accellerates. When a candle pierces the boundary and gets two corners of the body all the way out through the boundary, as often as not, the next candle is a reversal. So the price typically stays between the middle and one edge line or the other in a good up or down trend, sometimes steady and sometimes bouncing up and down a little, and on occasion, reversing after a top or bottom event. In a "sideways" trend it will gently bounce between the upper and lower boundaries. In your live account, set up your Bollinger Bands indicator and verify that what I have told you, holds true more often than not. You can see where you might want to sell that share of QQQ, when you have or seem to have just had a top reversal, or when a downward trend is established, whatevah. And the opposite, when you have a good buy opportunity, at a bottom reversal or at the beginning of an up trend. But don't do anything yet. That share of QQQ in the long run is going to increase in price. Losses historically are only temporary. Now the idea of course is to buy cheap and sell expensive, right? You buy when the stock (or other instrument) is down. You sell when it is high, particularly when it may have gone as high as it is going to go for a while. You "Sell the Top", and "Buy the Dip". Now at the time, you don't exactly know where that top or dip actually ARE. You can only see the trend behind you. But you can also extrapolate forward slightly and be right slightly more often than wrong. In your paper trading account, set up a chart for QQQ, with the BB (Bollinger Band) indicator. Set the time frame for an hour. Pick a buy opportunity in accordance with the general principles outlined above. IF you don't see a good buy opportunity, don't buy. When the chart tells you that you ought to sell, then sell. If you get a buy signal and then another one, buy another share. The idea is to get the darn thing cheap! Relatively speaking, of course. When you sell, you will have two shares, and you can sell separately, or together. Play around with this account for a month or two, at least, longer if you aren't making a paper profit. Then have a look at a related ETF called TQQQ. Its price gains and losses will be triple that of QQQ, but it is still based on the NASDAQ. Trade that for a few weeks, and see how you do with the more vigorous action of this "Leveraged" ETF. When you are comfortable with buying and selling the highs and the dips, start trading actively on your live account. If your account is under $25k and you are using a US broker, you can only make three day trades within any 5 day period. entering and exiting the trade in the same day. THis is called the PDT, or Pattern Day Trading rule and you can read all about that elsewhere. So maybe for now, with your live account, set your chart to day candles. You will be buying and selling over days instead of minutes, and so the PDT rule will not affect you. Buy and sell according to the indicator and the basic principles of herd trading outlined above. You will gain or lose a few bucks a day. Get used to it. Meanwhile keep trading in your paper account, with the TQQQ. You are waiting for a calamity. You are waiting for a bear market. When you have sold a high and the price is going down down down, you will wish you had more shares that you could sell. Well, you DO! Assuming you have a margin account and not a cash account. It is called Short Selling, and honestly it is not a good thing to get into at this point. But the Wall Streed Wonder Wizards have a solution. It is called a Reverse or Inverse ETF. TQQQ has an evil twin, the SQQQ. This ETF goes up inversely proportional to the decline in the NASDAQ. Bring up TQQQ and SQQQ each on its own chart, and study them. When one is trending downward, the other is trending up. Does this give you any ideas? So in your paper account, buy the TQQQ on its dip, and sell any SQQQ you have. Then sell the high of TQQQ and buy SQQQ. When you aren't sure what to do, sell the TQQQ and SQQQ you have, and buy QQQ and hold it. Add or subract the appropriate shares when appropriate. A good goal is to increase your traded funds by 1% or more per day. Set your paper account total to equal your live account, and start keeping say 3/4 of it in play if it is under $5k, somewhat less with larger accounts, and 25% if it is over $25k. This is just arbitrary and you can find plenty of books on managing your account that will advise you a lot more competently, but I believe that a small account should be traded more aggressively, especially if you are young and can simply work and earn to re-fund your account if you blow it up. The object is to try to get above the magic ceiling of $25k in an expeditious manner, accepting a reasonable amount of risk in the process that would be totally unreasonable with a $300k account owned by a soon to retire 60 year old. Up to now you have been manually entering and closing positions. There are special orders that you need to learn about, called Stop Loss orders and PT, or Profit Taking orders. For a "Long" position, where you buy low and sell high, which should be the only sort of trading you do initially, the PT order is a Sell Limit order. When the price gets high enough, the order triggers and executes. The Stop Loss order is a sell order that is placed at the lower limit of where you will tolerate the stock price before bailing out. When the stock goes down and touches the order, it triggers and executes. You typically start with the stop below where the noise might reasonably take the stock price so if the stock dives, you don't take a bad beat on it. Then when the stock is up well above the break even point, you bring the stop up so you have at least a few bucks of profit locked in, and follow the price up but leave plenty of room for normal up and down price jitter, and bring it up tight as you approach the top boundary. The PT order is at or just above the boundary and you will adjust this as the line move up or down. Yes, you can work "without a net", not using a stop, or a PT and just closing out manually, but if your attention is demanded elsewhere it is nice to be able to put the trade on autopilot. If you got a pretty big pair, you can even set automated orders to enter your next position! Not for the sensible trader HAHAHA! There are many variations on these orders that may be more suitable for you in certain situations such as Stop Limit, Trail Stop Limit, etc that deserve study and practice in your paper account. When you have traded your small paper account to at least double original size and at least $25k plus another thou for cushion, time to play for keeps. Put what you have learned and practiced into play in your live account. Small positions only, at first, maybe a single share bought or sold at a time, Get used to the fear and the greed, and master them. They will destroy you, otherwise, even if your knowledge of the markets is purest genius. Remember, you can't lose money that you don't bring to the table. If you take a beat, live and trade another day. Build your risk up gradually, and read a couple of good books on stock trading risk management. Learn why you can be right as little as say 30% of the time and still make a profit, and why you can be right 70% of the time and still lose. Still got your QQQ? Keep putting half of your trading profit into the buy and hold position. That's your ace in the hole. So why these ETFs and not regular "stonks"? Because the ETFs are based on a diverse index. They do what the market does. If you buy 30k shares of Acme Catapult Mfg Co, INC, and the news networks report on Wile E. Coyote being indicted on 3,752 counts of attempted murder and out of season roadrunner hunting and faces several millennia in prison, and ACM stock prices take a dive while other big players in the sector remain stable, you will wish you hadn't loaded the boat with that one stock, right? Diversity offers considerable safety, and the reduced volatility is a small price to pay, sometimes. The index ETFs such as the "Q's" expose you to a lot of different companies. The big ETFs are also very liquid. The bid/ask spread is low, even pre and post market. They are less easily manipulated. I think they are a fine way to start trading. Lastly, WHATEVER strategy you decide to follow, FOLLOW IT. Set hard and fast trading rules. Even silly rules can work surprisingly well if you FOLLOW them to the LETTER. When you start freestyling it, you are done and just don't know it yet. ALSO, don't be too disappointed if you blow up your first acount, or even your first several accounts. You are new, and so you are food. Investing is all about growth. Trading, especially intraday trading, is practically zero sum. For me to get money, I have to take it from you, and if I can, I will, and I neither know, nor care about, the fact that you just lost your house and your kids are barefoot and your wife has to work in the titty bar to buy bread and baloney while you skulk around your no longer running car in the Walmart parking lot, kicking your dog for begging scraps that you can[t afford to give him, and dodging process servers and loan shark who are after you for unsecured debt. Nobody knows and nobody cares. You brought fresh money to the table? Hey, thanks! Now go get some more, and you can sit in again when you have some more chips in hand. It's not robbery. It is LESSONS. But they can be expensive. None of the above should be considered to be competent advice. Follow it at your own risk. In fact I don't know if there even IS such a thing as competent advice on trading, except "don't trade". Standing by for howls of outrage from the experts. Cue on 3, 2, 1...
The best strategy is not focusing on a strategy first. Learn about market environments, market participants, what controls whats going on. Learn about risk management, active trade management, portfolio drawdown management. Only after you have a foundation of what is actually happening, should you look into a active trading strategy.
I think you have a highlighted a strong point over here. I personally experienced the perks of keeping a tracks of these things. And have also faced losses ignoring the same