It is not every day that you come across a strategy that has been used for many years, or at least not one that can be considered as a successful one. More often than not, a strategy will work for a short amount of time, maybe days, weeks, or months, but at some point in time, that strategy will stop working. Maybe the market conditions have changed, or maybe it was just luck to begin with. Whatever the reason, there is a good chance that without any changes or adaptations, a strategy will begin to struggle.
There are however a number of strategies, that at least a form of them has survived the dangers of time, they have been successfully used over a long period of time, years, in fact, there will need to be some adaptations as things change, but the principle behind them will remain the same. So let’s take a look at what some of these long-lasting strategies are, maybe one of them could be the right thing for you.
Support and Resistance Strategies
Support and resistance trading is one of the most widely used trading styles and strategies due to its simplicity and its ability to work in ranging markets, a condition that a lot of other strategies don’t work in. The strategy is pretty simple, you are looking at the support and resistance levels, they act as a block for the price, the market will be moving higher and lower between these markers, so as soon as it hits the lower support leave you will place a buy trade and as soon as it hits the higher resistance level you will place a sell trade. It is also one of the simplest strategies to chart, you can draw the lines based on previous prices and there are plenty of different indicators out there that will automatically do it for you too.
The support and resistance levels can also be used to work out the current sentiment and trader preferences within the markets, as well as show you when to enter or not enter the markets. Having a good visual representation of when the markets change position and where it is reversing and bouncing between will give you a good idea of what the markets may do in order to help you analyse other potential strategies too.
Trend Trading Strategies
This is quite a simple strategy in the fact that you are there to trade the market trends, when the price is moving up you will buy and when the price is trading down you will sell, some people only like to buy and some only like to sell. The strategy simply requires you to identify which direction the market is moving in and then trade that same direction. The RSI indicator is a form of trend trading that has been used for a long time and will continue to be used for a long time to come. It’s very simple. When the RSI reaches above 70 or below 30 then it may represent a potential reversal. You will then set some take profit and stop losses at the support and resistance levels in order to close out the trades, this strategy can be incredibly rewarding and very simple to do, as long as the market conditions suit it though.
Fibonacci Trading Strategies
You may well have heard of Fibonacci at some point in your trading career, it is a well-known strategy and is based on a famous mathematician from Italy. This strategy is often seen as a medium to long-term strategy and it is used as a way of following the support and resistance levels that are repeating themselves. Markets are often trending and the Fibonacci style of trading does well in these sorts of trending markets. The trading system works by trading long (to buy) when the price retraces at the Fibonacci support levels when the markets are on the way up, and when the price retraces on a Fibonacci resistance level when the markets are going downwards. It can be a very reliable and profitable strategy, but it can take a bit of time to get used to.
Scalping Trading Strategies
Scalping is a type of trading that is growing in popularity, the idea of scalping is that you are looking for smaller trades, and lots of them in order to make your profits. The strategy aims to make little bits of profits from small changes in the price, both up or down. You are able to increase your profits by simply trading more and increasing the number of trades the account is taking. The lower the timeframe the more trades you will need to win, the higher the timeframe the less you will need to win in order to remain profitable. Successful scalpers will have much higher winning ratios of trades, the one benefit to scalping is that it can be profitable in ranging markets as well as trending ones, so if you get the hang of it, you will potentially be able to make money whatever the markets are doing.
Candlestick Trading Strategies
If you look at the person next to you, they will most likely have their charts set to candlestick mode, this is afterall by far the most popular style of trading chart. There are of course other styles of charts, but these candlestick charts offer a lot more ways to analyse the markets when compared to the others. Candlesticks basically show the price movement over a certain period of time, from a small time frame like 1 minute all the way up to monthly candles. They can be analysed to look at price movements, potential reversals, trends, and breakouts, they can be seen to demonstrate and indicate many different trading phenomena. Learning what the different candles mean can be extremely valuable to a trader and can be an opportunity to make a lot of profits if you are able to successfully read them.
So those are some of the different trading styles that you are able to use and that have withstood the test of time. All five of them have been used for many years and will continue to be used for many more to come, so if you are looking for a strategy that you can keep going for a long time, one of these five would be a good place for you to start.