Strategies in trading are a vital part of success. It is said that a successful trader plans the trade then trades the plan. Here you will find articles covering a wide range of trading strategies for investment in general, different types of trading and of course, options.
There is also a section on trading psychology which relates to the mindset components of trading success.
General Investment Trading Strategies and Strategies for Different Types of Trading
A successful stock trading strategy is based on understanding and applying tools and techniques which help a trader to know which stocks to trade, how much to invest, when to buy, and when to sell.
Bear market strategies are designed to enable profit in a downturn. Options are an excellent vehicle for thriving during a bear market as they allow investors to trade with the movement of prices.
Stock trading signals are signs, often obtained from technical analysis or chart patterns, that indicate the most likely time at which a potentially profitable trade may be executed.
Entry strategy is the foundation of all successful trading, and enables a trader to determine which trades to enter, as well as the time and price at which it is most beneficial to enter these trades.
Buy signals are conditions or events that alert a trader to a promising time to enter a trade. These alerts may be obtained simply by observing price movement, or from indicators or chart patterns.
Timing the Trade
Timing the trade, relative to identifying when to enter and exit a position, is a vital component of successful trading and even a matter of minutes can make the difference between a win and a loss.
Pyramiding is an investment strategy in which an investor increases the size of their position in order to benefit by running with a winner, while keeping risk under control.
Averaging down is the term used to describe the strategy of buying a further amount of shares at a lower price than was originally paid, and as a result, lowering the average paid for each share.
Sector rotation is an investment strategy which involves the movement of funds between areas of the economy aiming to profit from specific economic sectors as their performance rises and falls.
Swing trading strategy involves choosing stocks which exhibit the price pattern movements suited to swing trading, as well as pinpointing the appropriate times to enter and exit a trade.
Day trading strategy encompasses ascertaining which stocks or options to trade, as well as understanding the most effective tools available in helping to determine optimal entry and exit points.
Warren Buffett is a value investor, meaning that he selects stocks based on the intrinsic value of the companies they represent.
Option Trading Strategies
Successful stock option trading strategy includes several key points, and it is important to understand and implement these keys in order to succeed in options trading.
The trading capital management strategy on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade.
Once you know what stock characteristics go best with what types of options strategies, you'll quickly find yourself having more success in your options trading.
Using Puts versus Calls
Assessing puts vs. calls and determining when or whether to trade these types of options is an integral part of a solid investment strategy.
Option spreads, which are constructed by concurrently buying and selling an equal number of options with the same underlying asset, can help reduce the initial costs involved in trading stock options.
Straddles are an options strategy with which the investor holds a position in both a call and put with the same strike price (at-the-money) and expiration date.
While the long straddle allows traders the best of both worlds, it’s important to keep a few things in mind before initiating this strategy.
A butterfly option, or butterfly spread, is an option trading strategy which has limited risk, but also limited potential gain. It is a non-directional strategy based on volatility factors.
An options trading strategy is a calculated way of using options singly or in a combination, in order to make a profit from market movements.
There are various different options exit strategies, and the trader must decide which is appropriate in any given situation.
Options Mistakes and Solutions
Options mistakes can make the potentially rewarding experience of trading options a minefield, unless you are aware of what these mistakes are and how to avoid them.
This article offers an overview of trading psychology and how mindset and emotions play a huge role in a trader's ability to succeed.
While there are many, many traits that are noticeable in top traders,
this article concentrates on only four of major importance.
Downfalls in trading psychology can be an insidious trap. Learning how to avoid them is an invaluable part of creating a winning trading mindset, and a road to trading success.
Trading psychology looks at the mental and emotional aspects of being involved in the world of the stock market. Volatility in particular, whilst an innate part of the stock market, is one aspect that many traders can find hard to deal with.
Coping with Trading Risks
Coping with risk in trading is absolutely vital if a trader is to experience both success and well-being. While risk is an inherent part of life, this is magnified in the stock market.
Dealing With Stock Market Crashes
Dealing with a stock market crash effectively means being prepared practically and emotionally to ride the waves without getting wiped out, and even to catch some opportunities while in the trough.