Best Trading Strategy – Make the Right Choice!

What is the best trading strategy? New traders and experienced traders, all search for the best trading strategy.  Results are what matter.  The “how to get the results” is what we will be dealing with in this post today. If you are learning how to trade forex and binary options, finding the best trading strategy is the key factor that will determine your results.

Are You a Day Trader Looking for the Best Trading Strategy?

Let us start off with the proper definition of day trading. What is day trading? How does a day trader execute trades?

A day trader buys and sells a currency pair or a financial instrument within the same day.  In many circumstances a day trader will take multiple trades during the same day.  Day trading is a trading strategy that takes advantage of small market movements.

If the time frame is very short, this trading style is called “scalping”.  A scalper monitors market movement based on certain market analysis, and hops in and out very fast taking small but regular profits.

This type of trading may be frowned upon by long-term investors, however, it is a reality and there are many traders making a living out of day trading.  Having said that, it can also be a dangerous game if you are new to trading and do not have a proper and trained training style.

In this post today we shall be looking at some basic trading strategies that are common to day trading.  Naturally, basic training needs to be followed by practice and advanced trading strategies. If you are still new, but serious about trading, you may want to subscribe to this site for coaching through our regular posts.

Best Trading Strategy – Trading Tips

#1 Nothing Beats a Proper Education

There is no question that knowledge is power.  You will need to acquire basic trading skills. These include checking “The Economic Calendar” on a regular basis to make sure that nothing is going to impact your trading in a negative manner.  As a new trader you do not want to trade the financial news. Although expert traders make a lot of money by speculating how the market will react to important news updates, a new trader must absolutely avoid this highly volatile trading time.

As a new trader you want to trade a healthy trending market.

Remember this maxim, you never trade a sleepy market (usually happens between different world trading sessions) nor do you want to trade a rough and choppy market (happens when there is very important news being announced).

The Economic Calendar will alert you which pockets of time to avoid trading.  This is one important tip for your best trading strategy.

#2 You will want to work only with the Best Brokers.

You cannot trade unless you open your trading account with a broker.  Both in Binary Options and also in Forex, you need to make sure that you are working on the best possible trading platform that is regulated within your geographical area.

We have tried, tested and reviewed many brokers.  We feel safe in recommending IQ Option.

The importance of dealing only with recommended brokers cannot be stressed enough.  Brokers offer different services.  The better the broker the more trading services you are afforded as a trading client.  Moreover, they are the keepers of your capital.  And this is why we cannot stress enough how important it is to trust your trading capital only to safe and legitimate brokers.

We have dealt with too many stories of scam brokers who suddenly disappear out of the radar or will not pay out your capital and profits.

#3 Allocate time for trading.

Whether you want to make a side income, or if you are planning on making trading a full-time profession, consider it as a regular job that needs time.

Trading requires time and patience.  You will need to scan the market for the best opportunities.  You do not want to jump on a trade only to realize that your timing is not right.  Haphazard trading can quickly burn your capital.  Therefore, exercising, control, time and patience is of utmost importance.

#4 Start off with trading on a Demo Account

Playing with dummy money is recommendable for beginners and new traders. It puts you in the trading business without burning your fingers.  You can become familiar with the platform that you are working on without commitment.

Most brokers will allow you a demo account once you have funded your accounts. Others will offer a free demo account without commitment but with limited services.

Trading on demo is an excellent trading strategy.  Use it to learn timing and the platform.  However, trading demo does not prepare you for the emotional and exciting rush of trading live.  Therefore, once your training is over, it is important to dive into the world of live trading.

#5 Live Trading – Start Small

Once your demo trading phase is covered, it is important to start trading live and experience how you will control your emotions, which are a natural side-effect of trading.

As a beginner, we highly recommend that you start small.  Moreover, we advise you to focus on only one or two assets.  Understanding how an asset reacts, or how a pair of currencies behave together, is the same as understanding a relationship.  It takes time.  Once you are comfortable with the pair you are trading with, you can add more assets to your portfolio.

Take trading to be one step at a time, it is useful advice when looking for the best trading strategy.

#6 Trading is All About Timing

We have already intimated that “timing” is of essence. The only way by which to make money trading is to enter when a trend is shaping and existing when a trend is ending.

Seasoned traders start trading as soon as a market session opens, however, as a newbie, you should take time to read the market.  Early morning hours are usually fraught with volatility.  This is because there is a lot of speculative trading.  The mid-morning hours are more stable.

It is advisable to find a trending market and unless there is some bombshell news item expected at the time mid-morning is the best time to dive in and take in those profitable trades.

#7 Looking for the best trading strategy? Have a plan

The nature of day trading is to exploit the market minute market movements. You need to have a clear plan when you are planning your trading day.  Here are some trading strategies that you need to be clear about before starting to trade.

1. Decide on your trading capital for the day and do not exceed it
2. Learn when to take your profits
3. Be disciplined and learn how to cut and accept your losses. Exit in a timely manner and do not keep hoping that a trend will reverse in your favor. Trading is a learned skill, and it has nothing to do with prayers and hope.
4. Know the importance of leveraging in Forex trading. Leveraging is borrowing money to trade with. With leveraging you can transact higher trades with money you do not have, hence make larger profits.  On the other hand, leveraging exposes you to potentially high losses – so know your trading plan well if you are looking for a best trading strategy.

#8 Be Realistic about your trading plans.

A good trading strategy does not mean that you will win every trade you execute.  New traders on average win and lose in the same proportion.  Whereas this can still see you with a net worth in forex trading, it will leave you out of pocket with binary trading.  Binary Option payouts are typically around 75% of your trading capital.  Therefore, you need to win at least 65% of your trades in order to stay afloat.

Therefore, as advised earlier, be prepared before you go trading live.  Make sure that you are over the 60% winning threshold.

Be realistic about your losses and do not beat yourself up over losses.  Every trader, even the most experienced ones, make losses.  Learning how and when to stop trading when you have a losing streak is an important trading strategy.

#9 Trade Professionally

You will know that you are trading professionally when you determine your best entry and exit points.  You will learn how to do this when you learn how to consult charts and patterns.  Charts and patterns will show you the opportunities that the market is offering.

It is important to learn about the following for successful trading:

1. Candlestick patterns. The formation of candlesticks is a predictable science that can be learnt in a trending market and will offer many opportunities for successful trading
2. Technical Analysis. These include learning how to determine trend lines. “A trend is your friend until the end” meaning you enter as a trend shapes and exit when it ends.
3. The value of trading is measured in volumes.  You want to trade in a market pregnant with volume and not on a lean and mean market.

#10 Find the right tools to help you trade.

Software systems are written with algorithms that can read the market when it is trending. Robots and trend indicators are your tools.

Make sure that like brokers, you pick legitimate software systems and not scam software that will eat up your capital.

The best trading software at the moment is Tai Robotic (Read our Tai Robotic review to learn more.)

Best Trading Strategy – The Bottom Line

Day trading can be lucrative.  It does not mean that it is easy.  It is a discipline that requires skill, time and control. There are plenty who have tried and failed.  However, those who fail are usually ignoring one or more of the techniques and guidelines that we have listed above.

Others who remain consistent and technical make a very handsome living out of day trading.  In many cases over time, they reach 6 and 7 figure profits.

If there is a point to re-iterate is to stay realistic and set your maximum loss per day and know when to stop trading because you are happy with your profits.