IS THERE A SUCCESSFUL/RELIABLE TRADING STRATEGY?

In one of the forums in the internet, this was a query asked and my reply-

There are some really nice answers provided for this query with screenshots to details in technical analysis with screenshots of different indicators, and then you have ORB in detail plus mention of NR4, NR7.

In addition, google too will provide you many strategies.

How much of it could you follow with the answers provided? Me being trading in the stock markets could understand and relate to all answers and definitely it helps to know how others are doing it. This helps to better understand or adds in some more detail to what I am doing or some things are new to me and can relate and try it out.

Are you a beginner, amateur, experienced trader?

A Beginner often gets interested by the Stock market due to media, social media and exceptional returns that it shows people are getting and feels left out. What most people show is profits. There are those very few who will show their losses as well.

He starts and if he gets lucky with first few trades gets addicted till a big loss hits him. Then the journey to learn starts, then search for the holy grail and there are a lot of sites which gives tips with 100% results, training stock market with promises of generating exceptional results and so on. The beginner tries all of this with failure. He may even stop at this point.

The few who survive, understand its lot of hard work and there is no holy grail to the stock market. He learns technical analysis and starts applying it. He still loses money till the point he comes with a system which works for him. He feels a transitions is made from amateur to a trader. He becomes confident and thinks he has got the holy grail which he was looking for as a beginner and wishes if he had got it earlier he would have made a lot of money instead of working his way back to profits or being slightly profitable. and then market which made him money is suddenly stops making money and he is looking at losses on a regular basis. What worked for him is not working now. This cycle repeats and keeps playing. Market keeps testing you and you cannot rest of your past. This reality hits you a lot in the stock market than in any other field. Compare this with a sportsman or actor, he will always be regarded highly no matter what.

The few who survive the above make it as traders who are consistently profitable. The few point I can think of is-

They know profits and losses are a part of trading. There is never a 100% profitable strategy. Besides technical, they have their risk management and money management rules in place.

They don’t get emotional over trades. Like when profitable they don’t show excitement or when in loss no sadness. It just another day at work for them.

They know there is no holy grail in the stock market. The search stops.

They could be using price action, supports and resistance, trend following indicators, oscillators or a combination of the above that’s suits them.

In addition, few will prefer to be positional traders (holding trades for more than a day or week or months) or intraday traders (covering positions within the day as few are not comfortable with overnight changes). In intraday, there will be swing traders as well as scalpers. Swing traders wait for a trend to form whereas scalpers take of few points. There could be a mix of positional as well as intraday traders too.

They keep learning in the stock market.

They identify changes in the stock market and trade accordingly. For example, when volatility is high, trend and pullbacks are well noticed on chart as seen in the books. If you get direction right you make huge profits and vice versa. But when volatility is low, you often see a lot of sideways movement, and then a trend is seen, which if you fail to catch, affects your emotion as again the market goes into sideways movement. A better way here is to scalp few points. Identifying this is important. They don’t compare their earning with fellow traders.

Does everyone go through the same cycle as mentioned above? I would say, most go through this. But there are some who adjust very fast and make the transition pretty early. Why I may not be able to answer. There are many on Quora who have answers to trading related queries which are really helpful and they already have a business made out of it and they are youngsters.

Get the noise out of stock market returns. The probability is always against you. Start learning. Try small in a live account, as with money being put, it starts affecting you emotionally and sticking to strategies becomes difficult. If it works, slowly work out your way with slightly more capital (only if you are profitable)

Try with positional trades if you are a beginner. The noise in intraday trading is too much to handle (your emotions could go for a toss) and also you have to be in front of charts all the time. Stick to your risk management and money management rules all the time. Don’t be tempted to get into what you think could be the trade of your lifetime. If you are successful, then you will be tempted to take greater risk where you may get lucky, but this is where the downfall starts.

If you find a mentor, nothing like it.

Does it work? You never know till you try. What work for one does not work for the other.

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Rikk

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