Best Trading Tips of All Time – Trading Strategies – March 8, 2024
The best trading tips will help you combine your strategies and trading symbols. Some steps in this algorithm may also benefit your investment strategy.
first trading tips
Keep your strategy as simple as possible.
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The system must contain a minimum number of parameters, regardless of whether it is a speculative or investment strategy. Your strategy should be as simple as a hammer. There is no need to use 10 indicators and complex algorithms to harmonize them.
explanation
First of all, multiple indicators or parameters continuously generate multidirectional signals, making decisions impossible.
If you focus on a few parameters, everything becomes simple. Buy when both are rising and sell when both are falling. If you have 10 indicators, they all point at different lags and in different directions. It’s just a mess. Even computers equipped with artificial intelligence cannot organize this.
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Second, complex systems are very sensitive to any market changes and therefore quickly become obsolete. Complicating your strategy shortens its lifespan. The simpler your system, the longer you can generate profits and survive bad markets less painfully.
That means you have three options:
- Use a simple system to enter and exit the market. If your system is profitable, you’re great. Your account will increase.
- Apply complex strategies in the market. not good. Even if the system is good, it doesn’t last long.
- Trade in the market without any system. In this case your account will be ruined.
yes
Many people write about the disastrous state of China’s stock and real estate markets. In fact, over the past five years, the Hang Seng index has fallen by half, including a third fall compared to last year.
They wrote about Chinese authorities considering creating a 2 trillion yuan ($278 billion) stabilization fund to support Chinese stocks.
It also concerns the liquidation of China Evergrande Group, beginning the difficult process of resolving one of the biggest casualties from the real estate crisis.
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Meanwhile, I remember very well the days when world markets closely monitored China’s economic situation every day. At the time, stock markets in Western countries fell on the slightest bit of bad news about China.
There is currently no sign of this correlation. Look at the DJIA, NASDAQ Composite, S&P 500 Index, and European Country Indexes. Many of them are maxed out!
Now imagine that your strategy takes many things into account, including China. Even if this system was good before, it would have stopped working a long time ago.
Of course, this is a very large-scale example. However, this highlights that simplicity provides system reliability and durability.
Trading tip number two
Choose how to control risk.
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There are two ways to reduce the risk of your trading strategy. Investors avoid many risks by diversifying their investments. Speculators do the same thing by setting a stop loss. There is no third way.
In a nutshell, the plan is as follows:
- Market participants who apply diversification are investors.
- Anyone who trades using Stop Loss is a speculator.
- If you don’t use one of them, you’ll be bringing your money into the market to give it to someone in the first or second group who read these best trading tips.
Third trading tip
Please select a period.
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If you are an investor, you will use daily bars and look at weekly bars. This is generally correct. But for guessing, everything will be more pleasant.
explanation
Stop loss size is the most important thing that is determined by the time period. Because this size always depends on the current volatility, i.e. price movement. After all, prices don’t move in a straight line. It’s meandering and trying to trick you. For example, you could use a 0.3% stop loss for 5 or 15 minute bars. Of course, this is not suitable for daily time frames.
yes
The stop loss size for the current Bitcoin price must be at least $2000 for the daily trading period. This is over 4% of the current price. If the size is smaller you will constantly get knocked out and end up with long losing trades. It is clear without any trading tips that a value of 4% is not suitable for intraday trading.
As a result, the size of your stop loss directly affects the number of open positions. Additionally, the type of funding curve, i.e. assets, of your trading account will greatly depend on this amount. Many bad trades in a row look very ugly on the charts and are psychologically difficult to endure. Additionally, the total amount of any fees you have to pay will also vary greatly depending on the number of transactions.
Now you can see how important something as simple as choosing the time frame for your trading strategy can be. Choose wisely! I hope my trading tips will help you create a successful trading strategy.
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