There are several factors to consider when deciding on what trading strategy suits you best. These include:
- Your individual psychology and make up
- Your trading aims and goals
- The time you can devote to trading
- What “feels” right
Your personal psychology and background: It would be useful to first look at what you do and as important what you don’t bring as an individual to trading, from a psychological and personal perspective.
For example, if you do not have strong computing skills then algorithmic trading is not for you. If you do have a strong analytical brain, then news trading may be a viable choice for you. If looking at charts to make decisions comes naturally to you, then perhaps swing or position trading, even day trading, would be a good fit for you.
Your trading goals: Are you looking to trade full time and make trading your primary source of income? If the answer is yes, then you would need to look at short-term trading such as day trading. But if you are looking to make top-up income, position or swing trading might be a better fit.
Time required: If you cannot follow markets closely throughout the day, then you cannot be a day trader. If you can give limited time each day to analyse markets and place orders, then maybe position or swing trading is a good fit.
What “feels” right: Try out different trading strategies using a demo account to determine which approach suits you and what strategy is profitable.
