Share Trading Strategies for Beginners and Experienced Traders
Looking for a winning share trading strategy?
Two Trading Rules to get started
1 Don’t risk more than 1% of your capital per trade (here is why)
2 Become a disciplined trader - use a mechanical share trading strategy.
If you’re new to trading then the truth is you don’t know how to read a market free style, and you’ll need learning wheels to help you keep your capital plus a mechanical share trading strategy can be helpful! Most importantly the mechanical strategy teaches you discipline, to do the right thing at the right time even if you think it’s wrong. Most people that get to trade are intelligent and successful people, but they are normally giving orders rather than taking them. You soon learn that the market is the boss and that’s that, it’s right all the time.
So, the first question is what type of mechanical strategy for day trading, trend trading or investment? The next question is which one makes the most money; the investment is a dividend / tax hold strategy which is the easiest; the day trading is the hardest and requires much more time and skill; so its the trend trading that may suit you to get started. With this you just trades trends and small corrections within the trend. This method tries to avoid the larger corrections in the market that can take anywhere from months to years! A basic trend can last weeks to months and possibly longer, but it is the trend that delivers the money.
If you can become disciplined and develop a deeper understanding of money management and test different share trading strategies to find a handful that suit your personality then you’re heading in the right direction, but as with most professions it takes time to progress from amateur to professional and you need to protect your capital during this process.
At TradingLounge we have a mechanical share trading strategy called Robo
It can be used intraday, end of day, weekly, month and quarterly. Join us for a 2 Week Trial and see it in action.
Of course there are so many strategies you can find on the web, but as mentioned above it’s more important you get your money management in place.
Here at TradingLounge we use only 1% of trading capital, so a $10,000 account can only risk $100 per trade.
The real value of a mechanical strategy is that it teaches discipline – most mechanical strategies are complete trading plans, well nearly, but they have the clear entry, the trigger and where the initial stop must go and when and where the trailing stop needs to go. All you need to do is execute the trading plan. If you can’t do this then you’re not going to make it. It does seem easy, but what actually happens is your emotions become extreme and you start thinking you should be doing something else, such as taking profit, moving the stop closer or further away etc. As you have probably experienced, when your hard earned cash goes into the market and the market is going up and down you too also will be going up and down emotionally. This is our attachment to what that money means to us, like happiness and freedom, it’s the new god :-}.
If you don’t get this under control you’re not going to make it as a trader, this is why the mechanical share trading strategy can help set the scene for a non-emotional trade, well at least it gets it under control. So combine money management and a mechanical trading plan to capture the most money from the trend.
The share and CFD trades that I place out in the Trades page for TradingLounge are not from a mechanical strategy, they are free style from reading Volume, Elliott Wave patterns and the TradingLevels concept. We still stay within the 1% risk with accounts under 30k and start reducing the risk as the account increases to 100K.
We are looking for trends and the markets that drive those trends. I like the word risk management, it’s just not money management but trade risk and market risk, as an example, when I place a trade for TradingLounge members that are risking 1%, my first task in risk management is to half that 1% risk – I tick that in my spreadsheet and my next task is to get that trade to break even and then tick that off and then moving either my stop loss into profit or taking a percentage profit. It’s a step by step process, when I have a certain number of trades at certain positions I can take more trades as I don’t want to be over exposed by risk.
Keeping it simple and trading with the main trend is the easiest and most profitable – this is called trend trading or position trading. If you want more action then trading end of day is as close as you want to get to the market while you’re learning. Scalping and day trading are time consuming and not always profitable just because you think you’re closer to the market.
Share Trading Strategies
There are many trading strategies you can find on the web and while we don’t use them at the TradingLounge, they can be profitable such as the Heikin-Ashi Trading Strategy, Swing Trading Strategy, Renko Trading Strategy and Moving Average Crossover Strategy and most of these types of trading strategies can be improved by using indicator filters such as Stochastics, RSI and MACD. There are so many indicators, but just remember they all come from the price and volume in one way or the other and my view is once you actually understand what they are calculating then you can simply see it in the price chart, so I don’t use them, but they are great to start with.
Share Trading Recommendations and reports