Top Trading Strategies You Need To Know Before You Start Investing

Top Trading Strategies You Need To Know Before You Start Investing

Whether you’ve dabbled in trading a bit previously, or someone that’s only starting to get into trading, knowing what works and what doesn’t is vital. Trading is a great way to make some extra cash, but you need to know what you’re doing if you want to maximize the potential and ultimately make more money than you started with. There are many strategies out there, but here we’ll go over some of the most popular ones for you to peruse.

  • DCA/WRB

    The Dividend Combination Strategy, also known as the Walter Bressert strategy, is one used by many traders for a nice and steady upwards trend in the market. This trading method was created by a man called Walter Bressert, a former trader that has been in the game for quite some time now, and it is one of the most popular strategies out there. It’s great for beginners because, while understanding stocks is always the most important thing to know how to do as an investor, you can set up an account with a broker that automatically does this trading method on your behalf if you want. If not, you can still do it manually without too much hassle. The main concept of the DCA/WRB is that you want to invest an equal amount each time. You invest a quarter, wait for the stock to go up, sell it at its peak, then reinvest in another one that has gone down by 25%, and so on. This way your investments will become more significant because although there are losses involved, they are minor and more or less make up for the profits you get on your other investments after they have gone up.

  • ZIGZAG Trading

    The Zigzag trading strategy is used to predict market trends. The zigzag trading strategy is also called the “zigzag indicator” and this strategy looks to buy low and sell high, but does so erratically. The zigzag indicator is said to be able to indicate a trend reversal or help one find emerging trends. Basically, it’s used for timing the market – buying at lows and selling at highs. While this one does require a little bit of time and knowledge, the good news is that all you have to do is watch the graph on your trading platform. If it starts making a zigzag line up and down, then you know there’s an opportunity for you there in buying at low points and selling when the value has risen. This is another really good beginner’s strategy because it’s so visual.

  • Point And Figure (PnF) Charting

    This is another one that requires some time to learn, but it can be extremely valuable. The point and figure charting method is used in technical analysis, which means that you’re using past price data for your projections about future prices. This one is different from the others as it doesn’t use the time to project or analyze movements – it focuses purely on price. With a point and figure chart, you don’t even need a set time period – you don’t have to worry about it daily. You can just look at a specific stock’s performance over a few days, weeks, months, or years to determine whether its movements have been significant or not. You can then use that information to figure out what the stock’s future movements are likely to be, by looking at its previous performance. This is a great one because it doesn’t need any time in front of the charts – you just look at the price points and make your determinations from there.

  • The Big Figure Strategy

    This is a strategy that takes less of a focus on the numbers and charts and more on your gut feeling. It’s similar to point and figure charting, but instead of looking at patterns, you look at psychology. In this case, what you’re doing is buying stocks that have just made an all-time high in price points. You buy them and sell when they make a new high after that, which is basically your confirmation of predicting an upward trend. Of course, it’s important to realize when a stock has reached its peak, and when there’s still room to grow in order to get in at the best time, but it doesn’t take any numbers or projections to understand this.

    Trading Strategies You Need To Know

These are just four, but there are a ton of trading strategies out there. If you’re someone who’s just starting in the world of investing and wants to get their feet wet in trading and learning how to do it best, then these can be great places to start. Obviously, if you feel like you need more information or a more personalized strategy that suits your personal goals and needs, then you can talk to a professional, and get help from someone who’s been doing this for a long time.