A Simple Trading Strategy For Novice Traders

Trading is both exciting and scary. For most people the stock market is a "black hole" that they fear with all their life. Taking the first step into trading with your own money is incredibly powerful and although most people prefer to save their money in a safe and secure bank account, trading allows you to multiply your investment - as opposed to the 5% you will get from safe and secure options. There is no doubt that the stock market comes with a lot of risks. There are just so many things that are completely out of your control and its these factors that can wipe you out completely. Many novice traders had to learn the hard way that you need to take baby steps when you start trading. Learning to trade can be a daunting task. Many people spend years in college to learn the theory and then work for years to build up the experience. If you step in as a novice it can be all overwhelming. The important thing however is that you start. Learning while you are actually trading is something that no book can substitute. Theory will only take you that far but in the end its only when your own capital is on the line that you will really step up and learn. There are dozens of trading strategies - some work better than others but nearly all of them work at some level. It all depends on your own level of skill and your aversion to risk. Technical trading is probably the easiest way to get started because it introduces you to technical charts. Learning to read basic chart patterns is a vital skill and the sooner you get it under your belt the sooner you will start to make money as a trader. The basic channeling pattern is the easiest one to trade on. The basic premise is that a stock that fluctuates between set highs and lows will tend to repeat that pattern. Its the typical "zig zag" pattern where a stock turns whenever it hits a certain high or a certain low. When it hits the low and it starts heading back up you will buy. When it hits its high and it starts heading down, you will sell. This is a very elementary explanation but many professional traders still trade on a basic channel pattern and you can use it effectively even if you are not all that skilled.

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