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Lesson 5. Choosing the strategy you can trust

6 - 10 min to read

In this lesson
HomeworkFAQ

Homework

  1. Choose 2 strategies (e.g., Trend-following and Breakout)

  2. Do 5–10 demo trades with each

  3. Write for yourself:
     – Why have you entered?
     – What tools did you use?
     – How did the trade perform?
     – Which style felt more natural?

FAQ

1. What is the difference between technical and fundamental analysis?

  • Technical analysis studies price charts, patterns, and indicators to decide when to trade.

  • Fundamental analysis looks at economic data and news to understand why prices move.

A combination of both gives the most reliable signals.

2. What do popular indicators like RSI, Moving Averages, and MACD do?

  • RSI shows overbought/oversold conditions, helping spot possible reversals.

  • Moving Averages smooth price data to show trend direction.

  • MACD tracks momentum and early trend reversals using moving averages.

3. What are three beginner-friendly strategies mentioned in the lesson?

  1. Trend-Following — trade in the direction of the trend using MAs and momentum.

  2. Breakout Trading — enter after the price breaks out of a range.

  3. News-Based Trading — trade short-term volatility after major economic events (high risk).

4. How should you match a strategy to your personality?

Consider:

  • Time available (swing, day trading, scalping).

  • Interest (charts vs. news).

  • Patience level (fast setups vs. long-term trades).

Pick the one you can follow consistently without stress.

5. Why should you test strategies in a demo account first?

Testing allows you to compare entry signals, SL/TP results, and comfort level with each strategy — without risking real money. Test each strategy with at least 10 demo trades before choosing.

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