Trading strategies for beginners

If there was a way for newcomers to the stock or crypto market to take a survey and ask a single question, I would ask this:

“What should I do to close a trade successfully?”

I am convinced that the vast majority would answer that in order to have a positive result in a trade you need to choose a good trade entry and exit point.

The so-called "near-marketers” have always known this and tried to use it to their advantage. Technical analysis only described patterns and levels but did not always give answers to the question of when to open the trade, how to accompany it, when to close it, and how to manage the portfolio. As a result, new indicators were invented all the time, and, of course, those that showed entry and exit points directly on the chart were particularly popular with beginners. By the way, I’ve already told you why indicators don’t work in my article “Use of charts and Indicators in trading”.

Why is the entry and exit point not so important?

Opening trades based on indicator data or trader signals from VIP channels makes you a one-track mind. Your only responsibility comes down to only pressing two buttons: BUY and SELL.

And if trading were that simple, we’d all be sailing our own yachts on warm seas, sipping expensive champagne. But the reality, and more importantly the statistics of beginners’ success is inexorable:

Most beginners lose more than they make in the exchange.

Important factors in trading

In addition to entry and exit points, the following factors are much more important for a trader:

• Risk management (more details in the article “Risk management in trading: how to protect your finances”)
• Choosing a comfortable timeframe for trading
• Context or background assessment: an analysis of what happened to the price before it approached the intended entry point; is there really an imbalance between supply and demand?
• Emotional stability. If you cannot explain your actions in terms of supply and demand, it means that they were made under the influence of emotions and unsupported expectations.

Based on these factors, the main key to a successful trading strategy is to have the right mindset. More specifically, to have the answers to the following questions:

1. How much can I afford to lose in a trade?
2. Won’t something distract me from trading in my chosen timeframe?
3. Have I gathered enough information, are all the conditions within my strategy for opening a trade met?
4. Am I able to follow the rules of my trading strategy with discipline?

How can Resonance help beginners develop their trading strategies?

There are several different tools on the Resonance platform that allow new traders to get a deeper insight into what’s going on in the market. Besides, they are constantly being improved and new tools are being developed all the time.

You can find out more about them and read a detailed description in the “Tool section”.

What these tools have in common is that they each contain some actual values, and numbers that can be twisted, compared, and contrasted in various ways. They cannot tell us with 100% probability where the price is going. But we try to squeeze as much information as we can out of the data that exchanges can provide to ordinary participants.

But it is also a mistake to focus only on the actual values (e.g. Market Stat and Market Delta values). The same figures can be interpreted differently if the price behaviour is different or if volumes are increasing or decreasing.

So, our goal as a community is not only to give beginners some trading strategies, but also to teach them how to build a logical chain. After all, sometimes the market situation changes very quickly. Sometimes iron-clad arguments, for example to go long, can be met with the strongest counteraction 15-30 minutes after opening a position, causing the trade to be closed completely or even to turn in the reverse direction. Without the ability to adapt, without understanding when to raise a stop or fix part of the profit, you will always take a loss that could have been avoided.

Tips for beginners

• Be sure to complete the course. The Basic and Middle levels are currently available.
• Follow the posts of our trusted authors. Try to absorb what they see and describe. What tools they use. Feel free to ask questions in our chats if something is not clear.
• Create your own private channel on Telegram. For your personal use. Send there your findings that seem interesting and try to describe in detail what is happening in terms of supply and demand. You will then be able to assess how accurate your way of thinking usually is and what trader’s style you relate to.
• Trade safely. If you are a complete beginner, use capital that will not affect your family or personal budget in any way. Start trading with as little as possible. Do not risk more than 1% of your deposit on a single trade. Remember, if you don’t have enough money, no strategy will allow you to multiply it in a short period of time. On the contrary, it will only add to the psychological pressure of fear of losing everything.