DIY: TRADING METHODS
Venturing into the market will require you to have a trading strategy. While there are several approaches to choose from, we cannot deny that it will probably still best if your method was crafted by your own mind. This way, you are free to add tweaks that will favor your best interests, and will be completely familiar and at ease with the setup your are following.
If you think building your own strategy is not possible, then think again. Contrary to what seems like an unattainable task for an ordinary trader to accomplish, creating your own tactics to be able to have a satisfying profit in the trading field is in fact achievable, you just need to be equipped with the necessary resources and materials which are not at all difficult to acquire, and of course, the perseverance to test each plan you come up with.
Organize the basics
The best way for you to begin formulating your strategy is to lay out all the necessary considerations first, like your preferred timeframe and type of market in which you want to trade. For an a more efficient guide, you may use stock screeners to help you help you filter stocks according to your preferred metrics hence it is important for you to run new screens that will best fit your strategy since stocks are bound to shift over time.
As you come up with various methods, the most crucial part of your procedure will be the testing. Initially, with you chosen timescale, you will monitor market movements using indicators such as candlestick patterns, volumes and charts. Once you are able to detect a potential profit within a certain strategy, go back to determine whether the same occurrence happened in other movements in the chart.
After this, identify possible risks and the necessary stops for you to obtain a profit without being stopped out. One tip for price shift observation is that short term anomalies generate more consistent profits, so when choosing a strategy, it would be advisable if you select those that will work over short periods of time.
Look back on historical data
Making spontaneous trades is a big no-no here. Although backtracking and making use of previous data does not equate to a sure profit, it will help indicate the success rate of your strategy by serving as a practice ground for your new found approach. Given this, it is important to keep in mind that not all strategies will work forever, and you need to make the most out of a certain method while it still works.
In devising your own trading techniques, it would be helpful to jot down notes, and combine it with a trading plan that will serve as a guide for you in all circumstances involving your strategy.
Moreover, it is critical to trade armed with confidence, and remember that you do not need to have an approach that works every single time. What will be more beneficial for you is to utilize one that will provide you with profit at the end of a day.
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