In this article you will learn how to trade profitably in stocks, commodities, index funds and Forex within 30 minutes. We start with an introduction of the best broker for new traders: You will learn how the software works and we will teach you how to open a position. In this tutorial we use the Plus software as an example. Plus is one of the best brokers, especially if you are a new trader. When you sign up with Plus, as a new trader you receive a demo of You can also practice as long as you like with the demo functionality!
Download the software and use this tutorial in combination with the software. The initial screen of Plus gives you an impression of what you can do right away. Under 1 you can open a trade under the trade button. Open positions are trades that are already open and closed positions are trades you closed with a certain result. At 2 you see several financial instruments you can trade in. Besides stocks, you can also trade in commodities, index funds and currencies.
At the bottom left of the screen 3 you can see an overview of the money you have available in your account. On the main area of the screen 4 you can, after selecting a category, select a certain security to study the more comprehensive data, such as a graphical chart 5. When you want to trade with Plus , you can for example open a position on a stock or a commodity.
Once you close the position the profit or loss is final. In the meantime though a lot can happen! There are two options within the Plus software: When you buy , you earn money when the value rises; when you short , you earn money when the value drops. You can thus always make money, even in times of economic crisis! At Plus you can put more money on a position than you have deposited. This works through a so-called leverage. With a leverage of one to twenty, you can open a position that is twenty times larger than the amount in your account.
The initial margin shows the amount of money that needs to be present to open up a position and the maintenance margin shows how much money you need to maintain the position.
As soon as the position has been opened, you can closely monitor the current result of the position. Profits are shown in green and losses are shown in red.
You can close the position manually by pressing the close button next to the open position. When you open a position, you can use the stop loss and take profit functionalities. With a stop loss you can determine the moment when you automatically take your loss; with a take profit you can determine the moment when you automatically take your profits.
When you want to trade profitably , it is clever to set the take profit twice as high as your stop loss. When you want to lose a maximum of 10 pounds on a position and you would potentially earn 20 pounds, you only need to make the right decision in 50 percent of the cases. Dealing with risks is essential when you want to make money by trading. One of the nifty options within the Plus software is the ability to open an order.
With an order you can dictate at what price the system opens a position. Using an order is very handy, as it makes it possible to put an order in place after your analysis is done.
Now that you understand how the Plus software works, we can go into the timing of your trades. In order to become a good trader, there are two things you need to keep in mind: In part two we look at the different circumstances on the market and how to deal with them and how you can find the trades that offer the highest chance of success.
On every timescale you are always able to see the market situation. Study the rates at a somewhat larger period to determine the general trend, there are three possible market conditions:. When the market has a clear trend , it is important to trade with the direction of the trend. When you see that the price is going up within the Plus software, you should buy; and when you see the price is going down, you should sell. It is important that you do not open a position randomly!
It is better to find a technical reason to open up a position. When there is a trend, the price moves in the direction of the trend. We call this an impulse. After the impulse the price drops down a bit, the retracement. The chance of success is at its highest when we open up a position right after the retracement. We buy in an uptrend in a temporary move down and in a downtrend we sell right after a temporary move up.
You can use this trading style until there is a case of a trend reversal , which is when a new trend forms in the opposite direction. But how do you time a trade? To time a trade properly, you need to look for horizontal levels. A lower horizontal level in an uptrend is what we call support and a higher horizontal level in a downtrend is what we call resistance.
By opening your position on a horizontal level , you increase your chance of making a successful trade. As almost everyone expects the price to move in a certain direction, this happens a lot at that specific level! This is why horizontal levels, which are in effect for longer periods of time, are a lot more powerful than a level which is reached only a few times. It can also occur that the role of a horizontal level changes after a break-out.
A resistance can become support or vice versa. Besides the uptrend and downtrend , a consolidation is also a possible scenario. In the case of a consolidation, the price fluctuates between two horizontal levels.
In a consolidation it is best to buy at the lower horizontal levels and sell at the higher horizontal levels. When you want to get good results, you need confluency , which is a gathering of multiple factors. We have already looked at the importance of the market situation and we have also talked about horizontal levels. To spot the perfect trade, however, it is also wise to use price action. In this third and last part of this tutorial, we look at how you can use price action within Plus That is why good traders would rather use candles.
With candles you can determine the so-called price action, which gives you an indication of possible further movement. Within the software of Plus, you can easily switch to candles by pressing the button shown below. A candle has a body that is colourized and a stick that sticks out.
The colour of the body indicates if the market is going up or down. Red shows if the price closed lower and green shows if the price closed higher. The stick shows what the reach of the price was within that period; how high or low did the price go?
The high and low tests are both very strong price indicators. They reflect the switch of buyers to sellers and vice versa. At the high test the price was pushed up significantly, but the buyers were too weak and the price came back down. This is a strong sell signal and, vice versa, the low test is a strong buy signal. The train tracks consist of two nearly identical bars next to each other, first a green one and then a red one.
With the twin towers it is the opposite, a red bar is intersected by an almost identical green bar. This combination can be seen as a merged high or low test; the two bars together form a failed break-out.
The train tracks are a strong sell signal because the sellers take over from the buyers. The twin towers is the opposite and can therefore be seen as a strong signal to buy.
The bullish engulfing bar is a dropping bar followed by a rising bar that both surpass the bar at the bottom and the top. The price dropped and the low of the previous bar was also breached; this is a strong signal to buy. Vice versa, the bearish engulfing bar is a strong sell signal. The rise is followed by a much stronger drop where both high and low surpass the previous bar.
The inside bars are a strong indicator of indecisiveness. The inside bar fits into the previous bar; thus there is no clear direction. The double inside bars are even stronger. Here the third bar fits within the second bar. After double inside bars, a strong movement down or up is to be expected. The doji bar sends out a strong signal of indecisiveness. The doji bar is almost symmetrical in the centre where the price went up or down.
You now know a lot more than other beginning traders. Do not forget that trading is not about intelligence; it is about managing and dealing with risks. Make sure you earn more on a winning trade than you lose on a losing trade. Another thing to keep in mind is that you need to look for the gathering of factors.
Do you have a good price action on a strong horizontal level? Therefore always use a stop loss!More...