• Home »
  • Tips »
  • Which are the most popular trading strategies used by traders?

Which are the most popular trading strategies used by traders?

Stock market has proven itself suitable for investors and traders to invest their hard earned money here and earn good returns on it by its past years performance. The returns which a trader earn at the end mostly depends upon the proficiency of the trading strategy being used. A strategy may work outstanding under some market condition and earn loss in other. Therefore an optimum trading strategy according to the current market needs is must. There are market analysts who performs good technical and fundamental research on market and then suggests stock tips and trading tips which are helpful in earning good returns. To play well in market and sustain in market in long term basis by earning high returns usage of appropriate trading strategy is required.

Some of the most popular trading strategies which are used by traders while trading in stock market are discussed below:

1)Breakouts

This strategy is most commonly used by traders. A breakout point is determined which is termed as key price level and further action of buying and selling takes place when the price breaks this pre determined level. This trading strategy is relatively easy for traders to understand and apply.
When market is following one direction from long time this trading strategy ensures that traders never miss any move. Market trend is identified and then it is expected that price movement will continue with that trend and reach extreme high. All you need to do is place your order above the high or below the low, by doing so trade will automatically enter when price moves.
This trading strategy must not be used when market is not trending as it may give negative results.

2)Reversals

Traders who are technical based generally use this trading strategy. There are times when movements are not clear. Traders identify price levels using which they can trade directly. Tools which are used in reversal trading are identical tho those which are used in other trading strategies.
This strategy also requires a bit of fundamental research. Traders have to identify that no major news are expected to be announced during that time period. Once this is identified traders can focus on technical analysis .This strategy should be when market is not trending in a clear direction. It should not be applied under all market conditions. Stock market trading tips of market experts can help as well to deal with market uncertainties.

3)Retracements

Traders have to identify a clear direction in which price will move and has to be confident that price will continue to move. An assumption is made while using this trading strategy that after each price move in the expected direction it will temporarily reverse as well .
Proper support and resistance levels are used to be on the safer side and traders have to perform a good fundamental analysis prior using this strategy. Strategy becomes ineffective when there are no clear reasons which supports price movement.

These are some of the trading strategies which traders prefer to use . There are many other as well. Traders must understand the trading strategy which they are using fully and then only use it while trading. Also having a proper understanding of market conditions under which such trading strategy should be used is must. There are financial services providers who suggests stock trading tips , mcx tips and other market related trading tips. These services can be used for trading safely by managing risk and returns in an efficient manner.