Are there any simple and effective trading methods out there?
There certainly are, but finding the right one that that best suits both your overall circumstances - such as the how much and how often you are prepared to apply time and effort to trade - and what your true character is like in the market - are you a risk taker? are you steady Eddie? - is the key.
Right, so that’s answered that one – easy, yes?
Well actually, no!
There are a myriad of other impacting factors to consider, so the reality is, in my humble opinion, that there is no straightforward answer to this question.
So what else do you have to consider?
Let’s just say for example that I suggest that a price action strategy is the best approach to take as it works for me. Then you would have to consider how many hours and the timing of those trading hours you can commit to – and if you can’t/don’t apply exactly the same as me then it’s not going to work for you.
I think you can see where this is going here – every individual should have their own custom built programme.
This answer really could fill a book, and on that point at the end of this comment I will offer some other reading suggestions that might help.
Why not start off by asking yourself what type of trader you really want to be?
Does your interest lie in becoming a successful day trader type?
Are you more of an intraday trader? In which case you need to ask yourself are you the type of person who can remain focused intensely in charts all day long!
A forex trader type? In which case Carlo’s previous article about Moving Average Convergence Divergence MACD is a very useful read for beginners venturing in to this strategy.
Is crypto currency your thing? If so, are you ready to face the challenges of this continually volatile, and seemingly unpredictable market?
Are you just interested in stocks or do you want to spread your interests into oil, commodities, small accounts, scalping, technical indicator strategies, options?
Once again you can see that the variables are almost endless, that is why you need to do some long and hard self-analysis from the get go. Be brutal in your critique – what really are your strengths, your weaknesses, your real interests and your liabilities.
If you can work your way through all of that with 100% honesty and total diligence, then the other key factor that many traders overlook, so intensely are they focused on entering the markets, is how they are going to get out – what is your exit strategy going to be?
Inevitably this is one of the most crucial aspects of trading – it’s all very well aiming to be a simple and effective trader but let’s be honest here, you also want to be a winner, someone who exits their trades with a profit more often than not!
So be clear from the start that you have an effective exit strategy developed to get out of trades in a timely fashion.
In closing here, I did say at the top of this I would offer some good reading, so try these three for starters, but remember that while there are many more to read and learn from, ultimately if you live by the sword you will die by the sword as it is a tough old world out there – good luck!
Reminiscences of a Stock Operator
How to Day Trade for a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology