Which strategies and products are most profitable? - Trading-Lab

newbie · #1 11-05-2007, 03:19 PM

as a newbie trader, I was wondering which trading strategies among all those available to traders are likely to make the most money for them?

I'm starting to study the most well known trading strategies and products and understand there is really a plethora of them: swing trading, scalping, momentum trading, stat arb, japanese candlesticks, system trading, etc. to be honest, it's quite overwhelming.

Then you have stocks, derivatives, forex, funds, etc. Which trading strategy should I start with? and what about choosing the right trading vehicle?

thanks

Leth · #2 11-05-2007, 03:52 PM

the most profitable thing you can do is work on your psychology inorder to find out which method feels right to you (e.g. how much risk and stress your stomach can tolerate). everything then becomes easier to comprehend. "analysis paralysis" is a thief that can rob us of our time and money. keeping it simple is key.
e.g. my method is long term trend following with leaps.

"Anyone can make the simple complicated. Creativity is making the complicated simple." - Charles Mingus

good luck newbie

ProTrader · #3 11-06-2007, 01:39 PM

well, that's a hell of a question. If I knew which strategies made the most money, I would be on my own island already.

MarkB · #4 11-07-2007, 02:05 PM

that's a tought and very subjective question. One strategy can make wonders for one trader, and be a financial ruin for another one. I guess my best answer would be that every trader should look into his inner self and understand what is likely to work for him.

Alchemist · #5 11-08-2007, 02:04 PM

I agree with what has been said so far. Leth and Markb, you got it. 90% of trading is psychology. Having said that, in order to first analyze and understand how other market partecipants think and behave, you have to understand how YOU think and behave.

I would also add one more thing trading and money expectations. you say, "as a newbie trader, I was wondering which trading strategies among all those available to traders are likely to make the most money for them?". as a newbie trader, you should not even be concerned with how much money you will make as you should concentrate on studying the markets first. I'm not saying doing profit projections is wrong. Hell, we trade to make some money too!

what I'm saying is that you should not be concerned with money making issues NOW. study the markets, use sound money management rules you fell most comfortable with (and stick to them!), and everything will fall into place. hope this helps

daytraderB · #6 11-12-2007, 02:00 PM

even though what's been said so far pretty much summarizes it, when it comes to choosing the "right" product, new traders should be quite careful.

For example, newbies should never attempt to choose forex as their first trading endeavour. Forex is a highly manipulated market and basically in the hands of big market partecipants and brokers. They should stay away from very short term options trading too, as lack of knowledge of option pricing basics can cause some serious losses to the novice trader.

I would suggest new traders start with stocks as they are the easiest trading vehicle to start with, in my opinion. grab a few listed stocks, preferably blue chips, and get to know them from the inside out. then, when you get good at it, you can get acquainted with other more "speculative" products such as options, or futures.

Leth · #7 11-12-2007, 03:20 PM

good perspective daytraderb

newbie · #8 11-15-2007, 11:55 AM

thanks for your help, guys

BlueChips · #9 11-19-2007, 01:58 PM

newbie, whatever you decide to do always remember to keep it simple. Stay away from overly complex trading strategies or products as those only make money for their promoters. Keeping it simple is the key for trading success.

swingtrader · #10 12-10-2007, 08:28 PM

I would suggest you stick with stocks too. I would stay away from any derivative-like product if you are just starting out. Also, you should learn to make money with longer term strategies first. Then, when you become profitable, you can try your hand at intraday trading. Start with swing trading and see how it goes. Also learn to trade both longs and shorts so you know how to make money in any type of market

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#1 11-05-2007, 03:19 PM
newbie Member Join Date: Oct 2007 Posts: 45	Which strategies and products are most profitable? as a newbie trader, I was wondering which trading strategies among all those available to traders are likely to make the most money for them? I'm starting to study the most well known trading strategies and products and understand there is really a plethora of them: swing trading, scalping, momentum trading, stat arb, japanese candlesticks, system trading, etc. to be honest, it's quite overwhelming. Then you have stocks, derivatives, forex, funds, etc. Which trading strategy should I start with? and what about choosing the right trading vehicle? thanks

#2 11-05-2007, 03:52 PM
Leth Super Moderator Join Date: Oct 2007 Posts: 621	the most profitable thing you can do is work on your psychology inorder to find out which method feels right to you (e.g. how much risk and stress your stomach can tolerate). everything then becomes easier to comprehend. "analysis paralysis" is a thief that can rob us of our time and money. keeping it simple is key. e.g. my method is long term trend following with leaps. "Anyone can make the simple complicated. Creativity is making the complicated simple." - Charles Mingus good luck newbie __________________ Nothing is more difficult than the art of maneuvering for advantageous positions. - Sun-Tzu Trade with the trend, Ride winners, Cut losers, Keep bets small, Use Stops - Old School Last edited by Leth : 12-10-2007 at 11:40 PM.

#3 11-06-2007, 01:39 PM
ProTrader Senior Member Join Date: Jun 2007 Posts: 109	well, that's a hell of a question. If I knew which strategies made the most money, I would be on my own island already.

#4 11-07-2007, 02:05 PM
MarkB Member Join Date: Jun 2007 Posts: 36	that's a tought and very subjective question. One strategy can make wonders for one trader, and be a financial ruin for another one. I guess my best answer would be that every trader should look into his inner self and understand what is likely to work for him.

#5 11-08-2007, 02:04 PM
Alchemist founder of Trading-Lab Join Date: May 2007 Location: New York, NY Posts: 296	I agree with what has been said so far. Leth and Markb, you got it. 90% of trading is psychology. Having said that, in order to first analyze and understand how other market partecipants think and behave, you have to understand how YOU think and behave. I would also add one more thing trading and money expectations. you say, "as a newbie trader, I was wondering which trading strategies among all those available to traders are likely to make the most money for them?". as a newbie trader, you should not even be concerned with how much money you will make as you should concentrate on studying the markets first. I'm not saying doing profit projections is wrong. Hell, we trade to make some money too! what I'm saying is that you should not be concerned with money making issues NOW. study the markets, use sound money management rules you fell most comfortable with (and stick to them!), and everything will fall into place. hope this helps __________________ Happy Trading!

#6 11-12-2007, 02:00 PM
daytraderB Member Join Date: Jun 2007 Posts: 63	even though what's been said so far pretty much summarizes it, when it comes to choosing the "right" product, new traders should be quite careful. For example, newbies should never attempt to choose forex as their first trading endeavour. Forex is a highly manipulated market and basically in the hands of big market partecipants and brokers. They should stay away from very short term options trading too, as lack of knowledge of option pricing basics can cause some serious losses to the novice trader. I would suggest new traders start with stocks as they are the easiest trading vehicle to start with, in my opinion. grab a few listed stocks, preferably blue chips, and get to know them from the inside out. then, when you get good at it, you can get acquainted with other more "speculative" products such as options, or futures.

#7 11-12-2007, 03:20 PM
Leth Super Moderator Join Date: Oct 2007 Posts: 621	good perspective daytraderb __________________ Nothing is more difficult than the art of maneuvering for advantageous positions. - Sun-Tzu Trade with the trend, Ride winners, Cut losers, Keep bets small, Use Stops - Old School

#8 11-15-2007, 11:55 AM
newbie Member Join Date: Oct 2007 Posts: 45	thanks for your help, guys

#9 11-19-2007, 01:58 PM
BlueChips Member Join Date: Jul 2007 Posts: 49	newbie, whatever you decide to do always remember to keep it simple. Stay away from overly complex trading strategies or products as those only make money for their promoters. Keeping it simple is the key for trading success.

#10 12-10-2007, 08:28 PM
swingtrader Junior Member Join Date: Nov 2007 Posts: 13	I would suggest you stick with stocks too. I would stay away from any derivative-like product if you are just starting out. Also, you should learn to make money with longer term strategies first. Then, when you become profitable, you can try your hand at intraday trading. Start with swing trading and see how it goes. Also learn to trade both longs and shorts so you know how to make money in any type of market