5 Technical Stock Analysis Strategies for Beginners

5 Technical Stock Analysis Strategies for Beginners

A consistent and effective strategy is based on in-depth technical analysis using charts, indicators and patterns to predict future price movements.

Day trading strategies are essential when you want to take advantage of frequent small price swings. A consistent and effective strategy is based on in-depth technical analysis using charts, indicators and patterns to predict future price movements.

Before getting into technical analysis let us begin with basics of trading strategy.

Money management- Before you start, sit down and decide how much risk you want to take. Keep in mind that most successful traders use no more than 2% of capital per transaction. If you want to be there when profits roll in, you have to anticipate some losses.

Time management - If you only devote an hour or two a day to trading, don't expect a fortune. You need to constantly watch the market and look for trading opportunities.

Start small - When you're on your feet, stick to a maximum of three securities in one day. It's better to get really good results in a few than to be average and not make a ton of money.

News and trends- It is not enough to understand the complexity of the market; Make sure you keep abreast of market news and events that affect your wealth, such as changes in economic policies. You will find a lot of financial and business resources online to keep you updated.

Time: The market will become volatile when you open every day and, while professional traders can read models and profits, you should have your time. So, hold during the first 15 minutes, you still have hours to come.

In order to make strategy you need to have these three elements Liquidity, Volatility and volume.

5 technical stock analysis strategies.

1. Breakout

The breakout trader comes in a long position after the asset or the security interruption breaks over the resistance. Alternatively, enter a short position as soon as the shares break under the support.

You must find the right instrument to act. If you do this in mind, the support and resistance levels of the asset. The more often the price of these points has taken how they are validated and more important, they become.

Entry points

This part is beautiful and simple. The prices established to close and above resistance levels require a bearish position. The prices established to close and below the support level needs a bullish position.

Exit points

Use the recent benefits of the good to establish a reasonable price. The use of charts will make this process even more precise. You can calculate the average recent price changes to create a goal. If the average price oscillation was 3 points in the latest changes to prices, this would be a sensitive goal. Once that goal is reached, you can leave business and enjoy the advantage.

2. Scalping

One of the strategy Scalping. It is particularly popular with the Forex market and seems to use the changes in the minute. The driving force is quantity. You will see the sale as soon as the trade is profitable. This is a fast and exciting way to exchange, but it can be risky. You need a high trade-related probability to make the low-risk reward ratio.

Be attentive to volatile instruments, attractive liquidity and is warm over time. You can't wait for the market; you have to close the operations to lose as soon as possible.

3. Momentum

Popular with business strategies for beginners, this strategy revolves around acting in sources of news and identifying the movements of substantial trends with high volume support. There is always at least one action that moves around the day of 20-30%, so there is a wide opportunity. It simply maintains its position until you see the signs of return and then gone.

Alternatively, it can fade the price drop. In this way, the goal of its price is as soon as the volume begins to decrease.

This strategy is easy and effective if used properly. However, you must ensure that you are aware of the upcoming news and profits. Only a few seconds in each operation will make a difference in the gain of your end of the day.

4. Reverse

Although it has been discussed and potentially dangerous if used by beginners, the reverse is used all over the world. It is also known as trendy negotiation, pulling the trend and an average reversal strategy.

This strategy challenges the basic logic as it aims to exchange the trend. It must be able to accurately identify possible pull-out, as well as predicting its strength. To do this, effectively, you need knowledge and independent market experience.

5. Pivot point

A pivot point strategy can be ideal for identifying and acting on critical support and/or resistance levels. It is especially useful in the Forex market. In addition, it can be used to identify points, while trend and breakout Trader’s pivot points can be used to locate prime level that must break as a breakout for a move.

Your profits from the end of the day depend a lot in the strategies of your work. So, it is worth considering that, often, the simple strategy demonstrates success.

Also, remember that technical analysis should play an important role in confirming your strategy. Even if you select the early entry or exit, the control over your risk is essential. If you still want money in the bank at the end of the week. you need to be patient to develop the strategy.