Online trading and, in particular, CFDs have revolutionized the world of stock market investments, making speculation on financial markets more accessible and compelling. Stock indices, stocks, forex, commodities, cryptocurrencies, and other sector terms, are no longer the exclusive domain of experts but are available to everyone.
With trading, it is, in fact, possible to make extra profits in a short time by investing in the performance of multiple market assets. This does not mean, of course, that all that glitters is now, the risk of losing money is high, and only those who have proper theoretical and practical preparation can achieve consistent results over time.
Although the trading platforms are simple to use and include tools that can help traders and investors, you should never get caught up in natural enthusiasm, which, combined with little experience and little practice, can lead to huge losses.
It is precisely around trading strategies that the success or otherwise of a trader, whether new or expert in the sector, orbits. The systems for capitalizing on every operation with minimal risk are varied, reliable, and based on relevant mathematical or statistical studies and theories. It is, therefore, worth knowing what the best trading strategies for beginners and experts are.
Trading strategies for beginners
Technical analysis with the Volatility Index
Technical analysis is an important study tool that can be used to implement a weighted operational strategy.
The technical analysis consists of reading the graphs and statistical trends on the market and is based on the so-called Dow Theory. So, that has happened in the financial market will tend to recur in the future with reasonable probability. Everything, therefore, lies in a historical analysis useful for predicting the behavior of the main assets.
The technical analysis is not only based on past data but also on graphic models and technical indicators useful for predicting possible changes in the market. Among these, the volatility index should be mentioned. This indicator measures the volatility of the price of an asset and also represents a critical “thermometer” to measure the trader’s attitudes towards the market.
Supports and Resistances
Among the most suitable trading strategies for beginners, there is undoubtedly one that is based on the levels of support and resistance. This system is ideal for any type of medium-term trading and should not be underestimated even for short-term trading operations.
The operating principle revolves around two key concepts. Supports, that is to say, price ranges tending to the downside in which the value bounces several times until the trend is reversed; the resistances, that is, price ranges tending instead upwards, the value of which will rebound up to change the route and aim downward.
Operators define the signals generated by these shifts as rebound (when the value, bouncing on support and resistance, changes the direction) and rupture (when the price, instead of rebounding and reversing the trend, “breaks” the support or resistance and continues its downward or upward trend respectively).
Once these elements work, it is easy for the beginner trader to develop a winning strategy.
Trading strategies for experts
Bollinger Bands and RSI
To put it in practical terms, Bollinger Bands are oscillators used graphically to represent an asset’s turnaround signal. They consist of three lines called deviations, the lower of which is comparable to support and the upper one to resistance. In contrast, the central one indicates the price trend in an average frame-time no longer than 20 periods.
The Bollinger Bands are perhaps the most used elements from experienced traders who seek significant returns without undue risk. They are suitable for multiple strategies. The most famous of which involves the use in tandem of another essential market indicator, the RSI oscillator, similar to the Bollinger Bands but whose moving average oscillates between two values instead of three, one settled on share 80 and the other on 20.
Once the more experienced trader has entered the merits of the Bollinger Bands system plus the RSI indicator, it will not be difficult to make his prediction:
Open a Long order if the asset (or instead of its value) is below the lower band (overbought area) and around the 20 shares of the RSI oscillator;
Open a Short order (sale) if the asset value is above the oversold zone (upper bar) and around 80 for the RSI.
Put your trading strategies into practice
Now that you understand what beginners and experts mostly use the trading strategies, you can immediately put these techniques into practice without risk through a demo account. In this way, you can refine your technique with virtual money and invest real money only when you have personally ascertained the quality of these strategies.
To open a demo account, simply register for free with one of the brokers listed below. If you want to trade in a real way, you can make a deposit, a few hundred USD or Euros are enough, although the profits are tied to the invested amount.
Do not forget the basic rule to follow with all trading strategies that is always to support accurate money management, since, even if using winning trading strategies, some operations will close at a loss.
Which platform to choose for Forex trading?
When planning to make a choice, you must take into account, also, other factors:
- experience in the market;
- amount of capital;
- type of trade (manual, automatic, semi-automatic);
- used strategy;
There are several of the most popular terminals, and MetaTrader (versions 4 and 5) is considered the most famous. Just visit this section and discover why 90% of forex brokers offer the MT4 platform. Most dealing centers use it; it is convenient, transparent, free, and has several versions (for PCs, smartphones, phones, etc.). The functionality includes more than a hundred tools and indicators, allows you to install robots, create your own, is easily configured for specific needs, and is accessible to mastering.
Ninja Trader is a program for advanced market participants. Many developers are guided by it, and its feature is the most convenient auto trading. Other advantages are a glass of applications, a variety of graphical tools, a large number of indicators, a strategy tester. The disadvantage is that the extended version is available only for money; only the shortened version is free.
ZuluTrade is suitable for those who do not have enough experience but want to earn money here and now. It allows professionals to manage beginner accounts by sending them signals to open and close positions in the automatic mode to their computer.
Mirror Trader is very similar to ZuluTrade in many ways. The distinction lies chiefly in the case that the person receiving the signal can ignore it if they are not sure of success. Thus, the work is carried out in three modes: manual, automatic, and semi-automatic.
Thinking about which platform to choose for Forex trading, you need to consider all its types, trying to make transactions on each of them. Only in this case will it be possible to dwell on the best option, which will allow success.