Learning how to trade properly requires you to master a few trading systems at once. These are vital for successful trading, as they provide you with structure, rules and a plan to follow. We are going to share some trading strategies here, and show you how to identify and pick the best ones for you.
Strategies to avoid
Indicator driven trading system
Although indicators are exceedingly valuable, their usage as a sole trading system is flawed. The major problem is that it works for the present moment, and flourishes little analysis to understand the future of the market. The system generates trading signals instead of pure price action. These Indicators lag, therefore, they tend to provide a poor and delayed signal, in comparison to price action, which gives most up-to-date information on the chart.
Pan trading strategy
This trading system comes with the belief of your computer turning into an automated cash machine. Far from financial markets’ reality, it causes both – experienced and inexperienced traders, to face significant losses. The best way to avoid falling into this type of trap is to use a trading academy to ensure you have proof of the company’s strategies’ live trading results. This promotes the understanding of realistic and honest market performance.
Strategies that work
Harmonic trading is the art of knowing particular price patterns in line with Fibonacci and retracement extensions, to calculate the turning points in financial markets. This system requires plenty of practice, but the rewards are well worth it.
This particular strategy has been circulating in the market for many years. Its analysis includes ascending triangles, consolidation breakouts, head and shoulder patterns, flag patterns and much more. The only major downside of this system is its comparatively dull approach, which lacks the characteristics of modern indicator systems.
Price action strategy
Price action is the current leader strategy in the market. The provision of updated information on the chart gives an outlook on the current situation in a simple manner that works for both – trending and ranging markets.
It’s fair to say that as long as you stick with price action or old-school technical analysis, it’s hard to go wrong, especially when you pair these with a good amount of Fundamentals! Be vigilant with the systems that are found on various forums. Ensure you get your training from a trusted broker that has live trading results and experienced traders. Always choose a system and strategy that matches your ability and personality. And have a good time trading!