Learn Stocks Trend Reversal Strategies

A trader must create a stocks strategy that they stick to when trading the online stock market. A trader must have the discipline to follow the rules of their stocks strategy at all times. That is why it is best to come up with trading strategies that are profitable - profitable stocks systems will be a lot easier to follow & stick to. This is because a trader knows that by following the rules of their stocks system they will be successful.

A carefully designed trading strategy which has been back tested and proven to produce profitable results is one of the keys to becoming successful when trading the stock market. This type of strategy will make it easier for stocks trader to follow the rules of their stocks strategy because they already know that the strategy is profitable, therefore maintaining the discipline to continue following the stocks system will be much easier.

Successful stocks strategies will also include:

1. Stocks money management guidelines

2.Stocks Psychology Mindset

These 2 will greatly improve the success of any stocks trading system.

However, Let us look at stocks price action strategy before explaining more about stocks money management and stocks psychology.

Counter Stocks Trend Strategies

Counter stocks trend strategies are best used to place trades on major resistance and support areas where stocks price is likely to reverse. These are the support and resistance levels where stocks price has not broken before.

However, this strategy is not the most reliable stocks method because trying to catch the stocks market top or the stocks market bottom is not the best strategy as the stocks trend may continue to move in the original direction of the trend for quite some time.

This strategy should therefore only be used to trade stocks trading that rarely stock trend. Stocks traders can draw support and resistance levels of the stocks price range and they will then use these levels to open trades - traders will open buy stock trades at the support level and traders will open sell stock trades at the resistance level. For a range bound market the stocks prices will keep bouncing off these points and the traders will open trades and keep trading these stocks price bounces.

Stocks Strategies Tips

Once a trader has come up with their stocks strategy, they should also include the following so as to make their stocks strategy more successful.

1.Stock Money Management Rules

2.Stocks Psychology

Money Management Rules

Stocks money management guidelines should be part of your stocks strategy - these rules will help you as a trader to manage risk. This means that you will use the two rules of stocks money management - these are risk : reward ratio & drawdown reducing technique when placing your stock trades to determine the lot size that you'll open in the stock market. The most popular stocks money management rule use in stocks & the one that you should also add to your trading plan is the rule that says a trader should never risk more than 2% of their account balance on any one single stocks trade.

To learn more about these two stocks money management guidelines, traders should read the stocks money management guide that is on the learn stocks tutorials section of this web site under the stocks key concepts lessons.

Stocks Psychology Mindset

In order to become successful when trading the stocks market a trader has to learn about stocks psychology. The stocks psychology or mindset that's required to become successful in stocks is one that avoids the emotions of fear and greed while trading the stocks market & is a mindset of total discipline that a trader will follow all their trading rules & their stocks strategy & only trade with signals which are generated by their stocks strategy. With discipline a trader will not trade unless their stocks strategy gives a signal. A trader will have the mindset of only following their stocks system 100% all the time without second guessing the stocks system. A disciplined trader will also not place trades in stocks market just because the stocks market has started to move up or downward, instead a trader will wait for a signal to trade to be generated by their stocks trading strategy.

In order to study more about stocks psychology and how to manage emotions while trading the online stocks market a trader can read the stocks psychology guides from the learn stocks tutorials section of this web site under the stocks key concepts lessons.