Simple And Easy Trading Strategies You Should Apply Before Trading
Most new traders think that trading strategies are only important after they enter the market and have some experience in trading. But they should know that they should learn about their financial habit to build the plan that suits them best. These strategies will help them navigate the market, continue gaining profit, and accelerate their path to reach their financial goals.
Trading Strategies As The Game Plan
Traders need strategies as the primary plan they will use most of the time. Of course, you also need to calculate the taxation, fees, and other small details related to the shares. But most importantly, you need to know yourself to understand the decision that will affect your future.
For example, Trader A and B have the same background, but Trader A prefers to apply a Value strategy to diversify their portfolio as large as possible. While Trader B opts for Dollar Cost Averaging and continues to invest regardless of the price and time. When they choose the correct instrument, they can earn a profit much faster than they should.
Several Types of Strategies
In general, there are four types of strategies or game plans in trading. To know which plan suits you best, you need to take a look at your financial lifestyle. Do you shop often? How susceptible are you to any interesting offer? Which one is more important for you, the current price or the growth possibility? These are some of the basic questions you should ask yourself before learning more about the strategies.
Growth Strategy
Traders with this strategy believe that the company will grow and can earn massive profits in the long run. However, they need to check the news for any changes in global policy and multiple executive decisions that will affect the company’s growth. A good example of a trader with this plan is the one who bought and has been holding Tesla stocks since ten years ago. The company growth is a staggering 9000% which means $1000 shares then equals $90,000 today.
Momentum Strategy
Traders with this plan can read the room best and have good prediction power. They aim for stocks with low prices that are going bullish. They believe that they can keep winning and smartly sell the stocks that don’t deliver to cut their losses. It’s safe to say that the plan works well for traders who have been in the industry for a while to recognize the trend immediately.
Value Strategy
One of the most popular plans is the value strategy. In short, the trader looks for stocks at the lowest price and holds as long as they can. Not to confuse with the growth strategy since traders who apply this plan are being specific with their preferred price.
Dollar Cost Averaging
Compared to the other strategies, Dollar Cost Averaging emphasizes having regular trades, or investment, to gain profit. The amount may not be as much as the other strategies, but it’s one of the safest methods and guaranteed a profit in the long run.
After knowing your financial habit, you can look into various trading strategies to apply in the market. Some traders may even combine these plans to earn maximum profit.
