Creating the first trading strategy for yourself is not a very difficult task. You need to start mastering the working of the marketing and trading tools like technical indicators. It is also necessary to devote adequate effort and time to backtest your strategy to make it accurate. It is only when you attain a good accuracy in predicting the market, that you start to earn good profits.
Start with deciding a market to trade on and a time frame for making your trades. Equities, commodities, derivatives, currency, and other markets are among the many options available to traders on the stock market. Similar to this, there are numerous other time frames, including one minute, five minutes, fifteen minutes, one hour, one day, and so on. You can make a decision with regard to your personality and your level of understanding of the market.
After you’ve decided on the market and timeframe, you’ll need to find a tool that helps you figure out whether the market is going up or down. For example, pivots points and trend lines are two price action tools that many traders use to analyse the market. Technical indicators like moving averages and relative strength index can also be used to get a better perspective.
Now it’s time for you to conduct deep research into the market, the time frame and the indicators that you have chosen. Analyse their previous movements and devise a strategy for entering and exiting the market. It’s also critical that your strategy incorporates sound risk management practices to ensure that your- losses are always within limits.
