{"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

Moving Average Crossover Strategy<\/h2>\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

End Of Day Trading Strategy<\/h2>\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

Breakout Trading Strategy<\/h2>\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

Scalp Trading Strategy<\/h2>\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

News Trading Strategy<\/h2>\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>\n

Range Trading Strategy<\/h2>\n

In this strategy, a trader identifies a particular range within which they sell and buy stocks<\/a> over a short period.<\/p>\n

Especially when there is no particular direction in the stock market, range trading is a beneficial strategy.<\/p>\n

This is because, in a trending market, there is hardly any range that you can identify.<\/p>\n

But, when there is no strong trend in the market, you can trade anywhere near the stock\u2019s current price to profit from the price movements over the next few days.<\/p>\n

For example, if a stock is trading at Rs. 1000, and you expect the stock price to increase to Rs. 1200, your trading range will be between Rs. 1000 and Rs. 1200, where you will place your entry position for the next few days, till the stock moves out of the range.<\/p>\n

\"\"<\/p>\n

Reversal Trading Strategy<\/h2>\n

Expert traders mostly use the Reversal Trading Strategy as it includes trading against the market’s direction.<\/p>\n

After conducting the required technical analysis<\/a>, traders place a sell order during a market uptrend and buy orders during a downtrend.<\/p>\n

The support level, where the falling prices stop falling and start increasing, and the resistance level, where the rising prices stop rising and start falling, are identified in this strategy to make the ideal exit and entry positions.<\/p>\n

Both the high and low trading prices for the day are also closely monitored to place the buy order during a downtrend in a way that the market reverses thereafter and to place a sell order during an uptrend exactly where the market starts falling.<\/p>\n

\"\"<\/p>\n

Gap Trading Strategy<\/h2>\n

Gaps in a market are blank areas on the stock\u2019s price chart that occur due to a strong upward or downward movement without any trading in between.<\/p>\n

This usually happens after a weekend since that is the only time the market closes.<\/p>\n

Traders usually identify this gap and closely watch the stock\u2019s movement in the first hour of the market opening to identify the price range where the stock is trading to make an exit or entry decision.<\/p>\n

If the stock\u2019s price moves beyond that particular range, it sends a buy signal to the trader.<\/p>\n

Whenever stock prices fall below the range, a sell signal is sent. The strategy is useful as it helps traders predict market trends and trade with the market, particularly.<\/p>\n

This strategy is best applied on lower frame time charts and hence is easily accessible by both beginner and expert traders.<\/p>\n

\"\"<\/p>\n

Trend Trading Strategy<\/h2>\n

The trend trading strategy is the one where the traders analyze the market\u2019s direction through trendlines and trade with the market.<\/p>\n

Traders analyze the past price movements of a stock and compare it with the current price movement to predict the future price movements and place trades accordingly.<\/p>\n

During an uptrend, traders place a long or buy position with an expectation of the stock prices to increase further.<\/p>\n

During a downtrend, traders either place a short order or exit the market altogether since they expect prices to fall further.<\/p>\n

\"\"<\/p>\n

Final Words<\/h3>\n

Trading the stock market is definitely not easy, but not as tough as most people think.<\/p>\n

By incorporating a few strategies and analyzing the market through technical indicators, one can place successful trades that can lead to decent profits.<\/p>\n

Use the strategies mentioned above to place successful stock market trades by identifying the ideal entry and exit points.<\/p>\n\"\"","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"excerpt":{"rendered":"

Stock trading is a high-risk, high-reward game. When you trade in the Indian stock market, you enter a $3.4 trillion market cap Exchange (NSE) filled with ample opportunities for beginner and expert traders. To trade successfully, there are a number of stock trading strategies that a trader must familiarize themselves with, and we will be …<\/p>\n\"\"","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"author":4,"featured_media":5939,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[290],"tags":[198],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/aayushbhaskar.com\/wp-content\/uploads\/2022\/02\/Popular-stock-trading-strategies-india.png","acf":[],"yoast_head":"\n9 Effective Stock Trading Strategies for Beginners - Aayush Bhaskar<\/title>\n<meta name=\"description\" content=\"Here are the top 9 most popular stock trading strategies that will help you place better trades in the stock market!\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/aayushbhaskar.com\/popular-stock-trading-strategies\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"9 Effective Stock Trading Strategies for Beginners - Aayush Bhaskar\" \/>\n<meta property=\"og:description\" content=\"Here are the top 9 most popular stock trading strategies that will help you place better trades in the stock market!\" \/>\n<meta property=\"og:url\" content=\"https:\/\/aayushbhaskar.com\/popular-stock-trading-strategies\/\" \/>\n<meta property=\"og:site_name\" content=\"Aayush Bhaskar\" \/>\n<meta property=\"article:published_time\" content=\"2022-02-09T11:53:15+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-07T16:53:28+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/aayushbhaskar.com\/wp-content\/uploads\/2022\/02\/Popular-stock-trading-strategies-india.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1080\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@FinAayush\" \/>\n<meta name=\"twitter:site\" content=\"@AforBhaskar\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\">\n\t<meta name=\"twitter:data1\" content=\"8 minutes\">\n<!-- \/ Yoast SEO Premium plugin. -->","gt_translate_keys":[{"key":"link","format":"url"}],"_links":{"self":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/posts\/5928"}],"collection":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/comments?post=5928"}],"version-history":[{"count":0,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/posts\/5928\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/media\/5939"}],"wp:attachment":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/media?parent=5928"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/categories?post=5928"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/tags?post=5928"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}