10 Best Trading Strategies For Beginner Traders
10 best trading strategies for beginner traders
This is the PDF version of the 10 best trading strategies for beginner traders. I hope that you enjoy reading this and learning about any new strategies that you might want to test. If you do enjoy this PDF, please remember to share it with someone you think could benefit from it. Learning together is better. The strategies I show below are systems that I have found to be profitable. That does not mean I have tested them and I am not saying they will be profitable for you. Please test the strategies if you see one you like and understand that this is not advice on what strategy is best. There is not a special strategy out there that can make you profitable. Find one you like and stick with it. 1. Breakout Strategy The first strategy that I think a new trader should backtest would be a breakout strategy. Once you see a few examples of these trades is very easy and simple to find future setups. The trades can be profitable if traded correctly and it can lead to consistent growth of gains. It’s a very simple strategy and there are many ways to trade a breakout but I will be showing two examples. The first example is a trendline breakout to the upside or downside and you will enter on the close of the breakout candle. The trendline needs to be drawn using the body of the candlestick and must hit at least two previous highs or lows. The stop loss will be placed below the low of the previous candlestick and the take profit is always 3:1 of the stop loss. As you can see in this trade example on GBPUSD, this was hit on the same day.
The second breakout strategy you could use is a breakout from a high or low. Placing your stop loss is a little harder with this strategy so make sure you are still having good risk to reward and risk management. I have used the same currency pair at the same time to show that both breakout strategies can work. One of them gets you in earlier but has a higher risk. The strategy is to take a recent high or low and wait for a breakout. Buy or sell at the close of the breakout candle and have your stop loss at the low of the previous high or low candlestick. Reference the image below if this is not making sense. The placement of the stop loss is harder and you might need to test a good placement for your style of trading. The take profit is the same as the previous strategy, 3:1 of your stop loss.
2. Continuation strategy The second strategy that I suggest new traders backtest would be a continuation trade. This is very similar to the second breakout strategy but you trade the trend and continuation of that breakout. The continuation trade I am showing here is made from a low, high and break of the low. Once price breaks the previous low, draw a line and put a limit order at that price. Place your stop loss at the high and your take profit 3:1. The key to this strategy is waiting for the pullback. You’re taking the same trade as the breakout trader but you are reducing your risk of a false breakout.
3. Pin Bar Strategy The third strategy is not as easy to find as the others in my own opinion. I have never personally traded candlestick patterns so these might not be perfect patterns. I have used my own knowledge of pin bar patterns to show what a few trades could look like. The image below shows one loser and 2 winners which would mean if you are risking 1% per trade, you would be in profit by 5%.
There are many traders out there that can trade candlestick patterns better than me so I would advice doing some research into this strategy if you are looking to trade it. As you can see there are some good trades but it's a very close stop loss that I have used. These are a few examples that I could see on GBPUSD. 4. Simple support & resistance strategy A very simple strategy that a beginner could trade would be support and resistance. I personally draw support and resistance differently to most and the reason for this is due to how I normally trade price. I draw my support and resistance lines from the body of the candle before the move higher or lower. Once you have drawn your lines, wait for a touch and a retest. Once you get this you are able to enter the trade and put your stop loss below the low of the candle and place your take profit 3 times larger than your stop loss.
In the example above you can see clearly two profitable examples of what this strategy can produce. These trades are very clean and are perfect support and resistance trades so let me reassure you that this will not happen every trade you take.
5. Round numbers strategy The next strategy for beginner traders that I would suggest would be a round number strategy. This is something that you can use in any strategy to create structure and simplicity to an existing strategy. I have shown how you can use this on its own but I would personally pair this with another strategy you like. I personally use round numbers in my own strategy and it helps with limit orders, take profits, entries and stop losses. It creates structure around an existing strategy that can really help new traders to stick to a strategy. Below you can see an image of a trade that you could have taken if you were trading this strategy on its own. Again I would use this with another strategy but this is just showing that it’s possible to trade on its own. You could enter at a round number line and have your take profit at the next round number, higher or lower. Then place your stop loss to make sure you have 3:1 return to risk ratio. As you can see, this is a profitable trade and was an amazing entry with very little drawdown.
6. Fibonacci strategy This strategy is one that I use with the round numbers that I showed in the last strategy. Combining these two strategies together can create a really strong beginner strategy that is very easy to follow and can be profitable. The image below shows a short trade on GBPUSD where I have placed my fibonacci from a high to a low and put a limit order in at my middle fibonacci number. There are many different ways to trade fibonacci so having the same numbers as me is not the key to trading profitably. The key is to have your fibonacci numbers and stick to them when trading and only follow your strategy. I put my stop loss at the high and my take profit at an equal or symmetrical move to the downside.
I like using this fibonacci retracement strategy because you can get onto trends and build positions up with minimal risk. It’s very easy to trade with the trend using this strategy and using fibonacci is part of my main Forex strategy. 7. QMP Dot Strategy The QMP strategy is a very simple strategy but its something that be profitable as well. You can find QMP indicators on the internet and I have one for MT4 and TradingView. This strategy is as simple as buy when you get a green dot and sell when you get a red dot. The image below shows selling when we get a red dot and exiting the position when we get a green dot. Placing your stop loss above the previous high and having an open take profit for when the green dot appears.
I personally do not trade this strategy but this could be a strategy that you like and could combine with another strategy I have previously shown. 8. Keltner Channel Strategy This strategy is similar to a Bollinger band strategy but I personally prefer to use Keltner channels instead. I am using TradingView for my charts here and I have used the settings, Length 8 and multiplier 2 with the source as Close.
The image above shows a short trade on EURUSD where price broke out of the channel. We would wait for the close of the candlestick and enter the trade with a stop loss above the high and an open take profit. We would exit the trade once the price breaks the lower channel. 9. AK_Trend Strategy This next strategy is a very simple one as well. Buy when the candlesticks turn green and sell when they turn red. You will need to be using TradingView for this strategy and you will need to search for the AK_Trend indicator. Once applied to your charts it will automatically turn your charts like the image below and you will be able to backtest this strategy and see if you are profitable with it.
This strategy is as simple as buy when the candlesticks turn green and sell when the candlesticks turn red. It's a very simple strategy and works really great when the market is trending. I have found it works best on the 240-minute timeframe so maybe it would be good if you like this strategy to backtest it on that timeframe first. The trade above is a very nice trade but of course, they will not all look like that. 10. Combining Multiple Strategies The final strategy and probably the best is to combine your favorite strategies together. This will increase the percentage of winning trades and also reduce the number of trades you will need to take. This is something that you will need to do when creating your own trading strategy. Remember that trading your own strategy does not mean that you need to create something original. You can take ideas from other people and combine them to create something you can enjoy trading and are profitable with. The image below shows three of the previous strategies combined together that can create a good strategy for you to use. I do not know if this is profitable because I have not backtested it so if you want to use this strategy, please do your own research and testing. This is a strategy combining Fibonacci, AK_Trend and round numbers. As you can see, using these three tools together created two profitable trades.
If you have enjoyed this blog post, then please download the PDF below where I show all of these strategies. You can download and take notes or read it without an internet connection. Please send this PDF or site page to anyone you think can benefit from these strategies.
If you have enjoyed this blog post then please consider subscribing so that you never miss a post! You can subscribe by going onto the home page and putting your email into the box and hitting the subscribe button.
I have a trading community where I post all my trading setups so if you are interested In joining, please use this link: https://discord.gg/gP4DNwe
Thank you for your time and I hope to see you in the next blog post.