Learn Stocks Price Action 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.
Stocks Price Action Stock Strategies
Stocks Price action is the use of stocks price movements to determine when to buy or close trades. Stocks price action will use the study of stocks chart patterns that form time and time again and these stocks chart patterns can be interpreted in different ways. The trader will use this stocks chart pattern to determine the likely market direction that the stocks market is likely to take next based on the stocks price stocks chart patterns that have been formed on the charts.
In stocks price action traders may use different methods to generate stocks signals from the chart setups. Some of these methods are:
Candles stocks trading chart patterns - a trader may use the study of Japanese candlestick chart formations which is the study of various candlestick formations along with how to interpret these candlesticks formations. A candlestick pattern may consist of only one stocks candlestick or a multiple of stocks candlesticks. To learn more about stocks candlesticks patterns traders can find these candlestick chart patterns tutorials on the learn stocks tutorials of this site under the stocks technical analysis concepts.
Support and Resistance Levels - traders can use stocks price action and combine this stocks price action with support and resistance levels. A trader will wait for stocks price to hit the support level to open a buy stocks trade and wait for the stocks price to touch the resistance level to open a sell stocks trade. The concept of trading major support and resistance levels is a very popular method in stocks. For example in a upward trend a trader may wait & only open buy stocks traders when prices hit support levels - at the same time a trader will take profit once the stocks price hits a resistance level and then wait for another pullback to open a buy stocks trading again.
To learn more about support and resistance levels traders can find these tutorials on the learn stocks tutorials of this site under the stocks technical analysis concepts.
Stocks Trend lines - traders can also use stocks trend lines to determine stocks price action direction or the stock trend. For an upward stocks trend line that shows the stocks market is trending up a trader will open buy stock trades once stocks price touches the upward trend line. For a downward stocks trend that shows the general market direction is downwards a trader will open sell stock trades once the stocks price touches the downwards stocks trend line.
To learn more about how to trade with stocks trend lines traders can find these tutorials on the learn stocks tutorials of this site under the stocks technical analysis concepts.
Stocks Chart Patterns - stocks chart patterns is different from candlestick patterns, these are two different methods of technical analysis, and traders should learn more about stocks chart patterns in the stocks tutorials section of this web site under the technical analysis concepts.
Chart patterns is the study of a formation of several candlesticks over a period of time. These patterns are consolidation patterns, stocks trend continuation patterns and market reversal stocks patterns. Stocks traders can use the study of these stocks chart patterns to determine the next likely market move.
Stocks Strategy 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.
