{"id":5928,"date":"2022-02-09T17:23:15","date_gmt":"2022-02-09T11:53:15","guid":{"rendered":"https:\/\/aayushbhaskar.com\/?p=5928"},"modified":"2022-12-07T22:23:28","modified_gmt":"2022-12-07T16:53:28","slug":"popular-stock-trading-strategies","status":"publish","type":"post","link":"https:\/\/aayushbhaskar.com\/popular-stock-trading-strategies\/","title":{"rendered":"9 Effective Stock Trading Strategies for Beginners","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"
Stock trading is a high-risk, high-reward game.<\/p>\n
When you trade in the Indian stock market<\/a>, you enter a $3.4 trillion market cap Exchange (NSE) filled with ample opportunities for beginner and expert traders.<\/p>\n To trade successfully, there are a number of stock trading strategies that a trader must familiarize themselves with, and we will be discussing the top 9 of them!<\/p>\n The MACD strategy is one of the most popular strategies that helps traders identify trend reversals, entry levels, and exit points in the market.<\/p>\n It consists of two types of averages, a short-term moving average, and a long-term moving average.<\/p>\n Whenever the short-term moving average crosses the long-term moving average from above, it sends an entry or buying signal to the trader, indicating the market is reversing upward.<\/p>\n On the contrary, when the short-term moving average crosses the long-term moving average from below, it sends an exit or selling signal to the trader indicating the market is reversing to the downward direction.<\/p>\n The moving averages can be calculated by adding the stock prices over a short and long period of time and dividing it by the number of stocks.<\/p>\n <\/p>\n The end-of-day trading strategy is used by traders who trade stocks when the markets are about to close.<\/p>\n This is because, towards the end of a trading day, stock prices settle in a non-volatile position, sending traders an ideal exit or entry signal.<\/p>\n In this strategy, a trader needs to understand the stock’s price behavior that particular day compared to the previous day to predict its price behavior the next day.<\/p>\n If the stock traded in the upward direction on that particular day, traders likely received a buy signal as the stock is expected to open at a high price the next day.<\/p>\n Whereas, if the stock is traded towards the downtrend, the traders mostly exit the market right before it closes, as a fall in the stock prices is expected the following day.<\/p>\n <\/p>\n The Breakout trading strategy tells traders the price beyond which the stock has been unable to move, and any movement above or below this range sends an entry or exit signal to them.<\/p>\n When a stock is trading low and immediately shoots up with a continued increment in the prices, traders take long positions in the market to profit from the increasing prices.<\/p>\n When a stock immediately drops after trading towards its high range, traders consider shorting<\/a> the trade or exiting the market altogether as it is expected that the market will continue to fall.<\/p>\n The philosophy behind breakout trading is that once the stock prices drop below the support level or go beyond the resistance level, the prices will become more volatile in the same direction.<\/p>\n <\/p>\n In this strategy, several small trades are placed on the same trading day to scalp out some percentage of profit from each trade, which, when accumulated together, become a considerable profit level.<\/p>\n A trader aiming to profit from the small price movements must have a solid exit strategy to exit the trades on time, to avoid losses, even in a single stock.<\/p>\n This is because a loss in one stock could wipe out small profits from the other 10 stocks.<\/p>\n This strategy is one of the best for beginners as it does not involve investing a large sum of money for a long time.<\/p>\n All you have to do is open a position, wait for the price to go up a bit and close it after some time to enjoy the profits.<\/p>\n It involves less risk than other times of trading like day trading, swing trading, position trading and more.<\/p>\n <\/p>\n The news trading strategy is one of those strategies that almost every trader<\/a> applies while trading. In this, traders trade stocks on the basis of news and other major announcements or market expectations.<\/p>\n The news should be assessed on time before making a move, and the time period both before and after the news is important to make the right bet at the right time.<\/p>\n For example, if there is news about an ABC company launching a big new product, it sends a buy signal to traders as the market expects the company to expand in the future and earn more revenue. More and more long positions are being taken following the news.<\/p>\n On the other hand, if a news announcement showcases ABC laying off 40% of its employees, market expectations from this company drop as people sense there might be something wrong.<\/p>\n In this case, traders sell their stocks in the company with an expectation of the prices dropping.<\/p>\n <\/p>\nMoving Average Crossover Strategy<\/h2>\n
End Of Day Trading Strategy<\/h2>\n
Breakout Trading Strategy<\/h2>\n
Scalp Trading Strategy<\/h2>\n
News Trading Strategy<\/h2>\n
Range Trading Strategy<\/h2>\n