Content source: Wechat public account Huiclassroom
There are all kinds of trading strategies in the investment market. If you don't know how to distinguish them, it's really "chaotic flowers gradually becoming charming eyes".
In fact, there are generally two principles for choosing a trading strategy. The most important thing is that it suits you, and the second is the strength of the trading strategy.
Whether it is suitable for you depends on your trading style. The strength of the trading strategy can be seen in the backtest results or directly choose the strategy of a master.
The most profitable in the trading market are banks or financial institutions, so let's take a look at how these professional traders trade today? What trading strategy did you use?
How do professional traders trade?
The Turtle Trading Method proves to us that professional traders are not born, and that anyone can become a professional trader through acquired training.
When we learn trading from professional traders, it does not mean that we need to use a large amount of money to make profits in the market like them, but to learn their trading methods and mentality.
Usually winning traders tend to have the following mentality characteristics:
Able to accept and bear transaction risks;
very self-disciplined;
Can follow the trading plan and keep their own ideas;
Do a good job in risk management and control in advance, and do not bear the risk yourself;
The authors of "Trading Psychology" found that the trading style of some elite traders has the following characteristics:
Either a quick thinker or a deep thinker, they can maintain the ability to focus;
They will also use some classic trading strategies, but the final execution strategy is unique. They have certain creativity and do not simply apply trading models;
Professional traders also learn from mentors or other professional traders at the beginning;
Can maintain a certain degree of emotional resilience and use loss as a learning opportunity;
Attention to detail;
We have been working hard to make our trading ability better;
Professional traders can also identify their trading strengths and weaknesses and capitalize on them. For example, some traders are good at trend trading, but weak in breakthrough trading, so they will avoid breakthrough trading in the market and trade on a larger scale during the trend.
One good deal at a time. What is a good deal explained in a book? A good trade is one that strictly adheres to your trade setup and plan. A trade is a good trade whether it turns out to be a losing trade or a winning trade if you follow your plan.
What trading strategies do professional traders use?
Most professional traders also use the same trading tools as ordinary retail investors. The difference lies in how these trading tools are used. For example, professional traders also use the RSI indicator, but they use it in a unique way.
Let's take a look at 3 professional trading strategies.
80-20 Trading Strategy
This trading strategy is based on the analysis of the price chart, the size ratio of the main body of the candle chart and the shadow line is an important signal. In particular, the main body of the candle chart is long and the shadow line is small, which is an important market reversal signal. The rules for long trading are as follows:
The body of the candlestick occupies at least 80% of the size of the candlestick;
The total length of the upper and lower shadow lines of the candle chart must be less than 20% of the whole;
When the market price breaks through the low point of the candle chart, you can go long;
Stop loss is placed below the low of the candlestick;
The same goes for the short selling rule.
This is a scalping trading strategy. This strategy works better in the futures market, and of course it can also be applied in the stock and foreign exchange markets.
As shown in the figure below, the previous trading day, the market price showed an upward trend and closed at a high price. The main body of the closing candle chart occupies most of the whole, and there is basically no shadow line. The next day, if the opening price breaks through the high point of the candle chart, you can enter the market to sell short, set the stop loss above the high point of the candle chart, and set the take profit space at the previous resistance level area.
Holy Grail Trading Strategy
The Holy Grail trading strategy uses technical indicators, moving averages and ADX indicators.
Go long within the following rules:
Wait for ADX to break above 30 and continue to rise;
Wait for the market price to retest the 20 MA, after the price touches the 20 MA, go long at the price high;
Set a stop loss below the low;
Take profits with trailing stops, or take profits at recent highs;
The same goes for the short selling rule.
As shown in the figure below, in the EUR/USD trading chart, the market price is showing an upward trend above the 20 MA, when the ADX indicator reaches the 30 level and the market price retests the 20 MA, you can go long at the closing price of the white candle and set the trailing stop loss.
Three Swing High Trading Strategies
This strategy also does not require any technical indicators and relies purely on price action. Can be used on any timeframe depending on your trading style.
Go short in the following rules:
Find three consecutive price swing highs with approximately the same time interval between each swing high;
Once the market price breaks through the 20% range of the second high, a short position can be established;
Stop loss is placed above the third swing high;
The same is true for the bull rule.
As shown in the figure below, three consecutive swing highs have been marked in the EUR/USD trading chart. When the market price falls below 20% of the second high point, enter the market to short. Stop loss is placed above the third high.
The above is today's sharing. We have summarized the trading mentality, trading methods, tools and trading strategies of professional traders. No matter how long you have been trading, always remember to learn to identify your own trading advantages and disadvantages, follow the trading plan, and do a good job in every transaction, which is the key to success.
Add
