If you’re just starting your trading journey, you might feel like you’re staring at an endless menu of strategies, each claiming to be the perfect path to success. Most beginners miss their goals because they start with something too complicated, too risky, or too time-consuming to follow consistently.
At Profits Run, we’ve learned that the best trading strategy for beginners is simple to follow, realistic to execute, and built on a foundation of risk management. After more than 50 years combined in the markets, we’ve seen great results come from strategies that fit your lifestyle, safeguard your capital, and provide repeatable setups you can execute with confidence.
In this guide, you’ll discover four beginner-friendly strategies that meet those criteria. Plus, the core principles every new trader should understand before placing a single trade.
By the end, you’ll know which approach matches your goals, how to start practicing it, and the next step toward building a trading plan you can trust.
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Important Disclaimer: All Profits Run programs are delivered in self-paced, digital format. We do not provide personal coaching, one-on-one mentoring, or individualized trading advice. Our educational materials are designed for independent study and application.
Risk Disclosure: Trading involves substantial risk of loss and is not suitable for all investors. Past performance is not indicative of future results. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.
Many new traders jump into the markets full of excitement only to find themselves frustrated after a few weeks or months. It’s not a lack of intelligence or ambition that derails them. The real problems usually fall into a few clear categories:
We’ll explore each of these problems in more detail below.
Entering and exiting based on impulse, headlines, or social media chatter is one of the fastest ways to lose money.
Without a clear roadmap, you’re essentially gambling rather than trading strategically. We’ve seen countless beginners buy a stock because someone on Twitter mentioned it, only to panic-sell when it drops 5% because they never considered where they’d exit.
A proper trading plan acts as your decision-making framework when emotions run high. It should specify exactly what chart patterns or technical setups you’re looking for, at what price you’ll enter, where you’ll place your stop loss, and what your profit target will be.
Most importantly, it should define your position size based on your account balance and risk tolerance.
Consider this: if you risk 2% of your account on each trade and have five losing trades in a row, you’ve only lost about 10% of your capital. Without a plan, you might risk 10% on a single “sure thing” and lose it all when the trade goes wrong.
Solution: Create a written trading plan with clear entry, exit, and risk rules, and follow it without exception.
One bad trade can erase weeks of progress if position sizes are too large or stop-loss orders are missing. Risk management protects your money and your ability to keep trading. The difference between successful traders and those who blow up their accounts usually comes down to how they handle their losers, not their winners.
Many beginners think they need to risk a large percentage of their account to make meaningful profits. The math doesn’t support this thinking.
If you start with $10,000 and consistently make 2% per month while risking only 1% per trade, you’d have over $12,600 after a year. But if you risk 10% per trade and have three bad trades in a row, you’re down to $7,290 and need a 37% gain just to break even.
The psychological impact is equally important. When you risk money you can’t afford to lose, every price movement becomes emotionally charged. You’ll exit winning trades too early out of fear and hold losing trades too long out of hope. Both behaviors destroy profitability.
Solution: Decide your maximum risk per trade before you place it, and stick to that limit every time.
Jumping into “hot tips” or heavily promoted trades without understanding the setup often ends in losses. Social media has amplified this problem dramatically. When you see everyone talking about the same stock or cryptocurrency, you’re usually seeing the end of the move, not the beginning. By the time retail traders pile in, institutional money is often looking for the exit.
FOMO drives many beginners to abandon their strategy and chase whatever is trending. They buy high because they see others making money, then sell low when the hype dies down and reality sets in. This cycle repeats until their account is depleted.
Professional traders do the opposite. They look for opportunities that others are ignoring or have given up on. They understand that the best setups often feel uncomfortable because they go against popular sentiment. When everyone is buying, they’re looking to sell, and when everyone is pessimistic, they’re hunting for value.
Solution: Only trade setups you’ve tested and understand completely. If you hear about a “can’t miss” opportunity, ask yourself: What’s my edge? Where’s my stop loss? What’s my profit target? If you can’t answer these questions clearly, walk away.
Taking too many trades can lead to sloppy execution, while trading too little can stunt skill development. Both extremes prevent you from developing the consistent habits that lead to long-term success. Overtrading usually happens when you’re trying to force profits or recover from losses quickly. You start seeing setups that aren’t really there or lowering your standards just to be in a trade.
Undertrading often stems from analysis paralysis or fear after a string of losses. You spend hours analyzing charts but never pull the trigger, even on good setups. This prevents you from gaining the real-world experience needed to improve your timing and execution skills.
The key is finding your strategy’s natural rhythm. A swing trader might only see 2-3 good setups per week, while a day trader might execute 5-10 trades per session. Neither frequency is inherently better; what matters is consistency with your chosen approach.
Solution: Track your trades and aim for a sustainable pace that matches your strategy’s frequency.
Trying to “win back” a loss by forcing trades usually compounds the damage. This emotional response is one of the fastest ways to turn a manageable loss into a catastrophic one. When you’re focused on recovering money rather than following your strategy, you’ll take trades you normally wouldn’t consider and risk more than you should.
Revenge trading often involves abandoning your stop-loss levels, increasing position sizes beyond your risk management rules, or jumping into completely different markets without proper preparation.
We’ve seen traders lose their entire accounts in a single day because they couldn’t accept a 2% loss and kept doubling down trying to get even.
The market doesn’t care about your personal profit and loss statement. It will continue moving based on supply and demand, regardless of whether you need to make back money from your last trade. Treating each trade as an independent event with its own risk-reward profile is crucial for long-term survival.
Solution: Take a break after a loss, review what went wrong, and wait for a valid setup before trading again.
Jumping into mediocre setups instead of waiting for high-probability opportunities often leads to unnecessary losses.
In a world of instant gratification, the concept of waiting for the right moment feels counterintuitive. But trading rewards patience more than almost any other skill. The best setups often take time to develop, and the most profitable traders are willing to wait for them.
Impatience manifests in different ways: entering trades before your setup is complete, exiting winning trades too early because you’re worried about giving back profits, or forcing trades during slow market periods when your strategy isn’t effective. Each of these behaviors reduces your edge and increases your costs.
Consider that professional traders might wait weeks or even months for the perfect setup in their area of expertise. They understand that one great trade can make their entire year, so they’re willing to sit on their hands until the odds are heavily in their favor.
Solution: Accept that not trading is sometimes the best move. Quality outweighs quantity.
Major economic announcements, earnings releases, or geopolitical developments can move markets unexpectedly.
Many beginners either completely ignore fundamental events or get caught off guard by them. Both approaches can be costly. A perfectly good technical setup can be ruined by an unexpected news announcement that sends the market in the opposite direction.
The challenge isn’t predicting how markets will react to news, but rather positioning yourself appropriately around known events. Markets often become more volatile before major announcements as traders position themselves or reduce their risk. Understanding this rhythm can help you avoid getting stopped out by temporary volatility or caught in unexpected moves.
You don’t need to become an analyst to incorporate news awareness into your trading. Simple awareness of when major events are scheduled can help you adjust your position sizing, avoid entering new trades too close to announcements, or even identify opportunities when markets overreact to news.
Solution: Keep a calendar of important events and plan trades accordingly.
A strategy that works in a trending market may fail in a choppy one. Markets cycle through different phases: strong uptrends, downtrends, sideways consolidation, and high-volatility periods. Each environment favors different approaches, and rigid adherence to one strategy regardless of conditions can be costly.
For example, trend-following strategies work beautifully when markets are making sustained moves in one direction but can get whipsawed during sideways markets.
Conversely, range-trading strategies excel in choppy conditions but can miss out on big moves during strong trends. The key is recognizing which environment you’re in and adjusting your expectations accordingly.
This doesn’t mean completely changing your strategy every week, but rather understanding when to be more aggressive, when to be more conservative, and when to step aside completely.
Some of the most successful traders we know reduce their activity during certain market conditions rather than forcing their preferred approach when it’s not suitable.
Solution: Learn to recognize changing market environments and adjust your approach when necessary.
Indicators can be valuable tools, but they don’t predict the future on their own. Many beginners load their charts with multiple indicators, hoping that more information will lead to better trades. Instead, this often creates confusion and conflicting signals that lead to paralysis or poor decision-making.
Indicators are mathematical calculations based on past price data. They can help confirm what price action is already telling you, but they lag the market by definition.
Relying solely on indicator signals without understanding the underlying price action and market structure is like driving while only looking in the rearview mirror.
The most successful traders use indicators sparingly and understand exactly what each one is telling them. They focus primarily on price action, support and resistance levels, and overall market context, using indicators only to confirm their analysis or provide additional insight into momentum and trend strength.
Solution: Use them alongside price action, market structure, and broader context and not as your sole decision-making method.
At Profits Run, we’ve seen these patterns play out time and again. The good news is they’re avoidable when you start with the right foundation.
A strong trading foundation has three pillars:
Protecting your capital is the priority. Decide your maximum loss on each trade before you even look at potential profit.
This principle sounds simple, but it requires a complete shift in thinking for most beginners. Instead of asking “How much can I make?” your first question should always be “How much am I willing to lose?”
Capital preservation requires setting stop losses and understanding that your trading account is your business inventory.
Just as a retailer wouldn’t bet their entire inventory on one product, you shouldn’t risk a large percentage of your account on any single trade. Professional traders often risk only 1-2% of their total capital per trade, which means they can survive 20-30 consecutive losses and still have most of their account intact.
Position sizing is the mathematical foundation of capital protection. If you have a $10,000 account and decide to risk 2% per trade, that’s $200 maximum risk. If your stop loss is $2 away from your entry price, you can only afford to buy 100 shares.
Many beginners skip this calculation and buy as many shares as they can afford, which often means they’re risking 10-20% of their account on a single trade.
The psychological benefits of proper capital protection extend far beyond the math. When you know your maximum loss is small and manageable, you can focus on executing your strategy rather than worrying about catastrophic outcomes. You’ll sleep better, make clearer decisions, and avoid the emotional extremes that destroy trading accounts.
Use stop-loss orders, size positions appropriately, and never risk more than you can comfortably lose. This discipline prevents devastating losses and gives you the confidence to keep trading after a setback.
Every professional trader has losing streaks. What separates them from failed traders is that their losers are small and manageable while their winners are allowed to run.
A strategy that demands hours of real-time monitoring won’t work if you can only check the markets in the evening. Likewise, a slow-paced method may feel frustrating if you enjoy active decision-making. A big mistake we see beginners make is choosing a strategy based on potential profits rather than practical fit with their daily life.
Be realistic about your schedule, focus level, and personality so your strategy works with your daily routine and not against it.
If you work a traditional 9-to-5 job, day trading during market hours is impossible unless you’re willing to risk your career by trading at work. Swing trading or position trading strategies that require end-of-day analysis might be more realistic.
If you’re retired or have flexible hours, you have more options, but you still need to consider your energy levels and attention span.
Your personality also plays an important role. Some people thrive on quick decisions and immediate feedback, making them natural candidates for shorter-term strategies. Others prefer to analyze situations thoroughly and make decisions slowly, which aligns better with longer-term approaches.
There’s no right or wrong personality type for trading, but there are strategies that fit some personalities better than others.
Technology and market access also factor into this equation. If you’re trading on a mobile phone with limited charting capabilities, complex technical analysis strategies become impractical.
If you live in a time zone where major markets open in the middle of the night, real-time strategies become challenging unless you’re willing to adjust your sleep schedule.
The stress factor is often overlooked but crucial. A strategy that keeps you glued to screens all day might generate profits but destroy your relationships and health.
Consider the full cost of your chosen approach, not just the financial aspects. The best strategy is one you can execute consistently for years without burning out. Choose a strategy that fits your lifestyle rather than trying to force yourself into an incompatible approach.
Stick to trading patterns and strategies that have been tested in real market conditions, preferably across multiple time frames and environments.
The trading world is full of new systems, indicators, and strategies that promise revolutionary results. While innovation has its place, beginners are much better served by mastering time-tested approaches that have worked for decades.
Proven setups have survived multiple market cycles, economic conditions, and technological changes. Patterns like support and resistance, trend following, and breakout strategies have been profitable for generations of traders because they’re based on fundamental aspects of human psychology and market structure that don’t change.
When you learn these foundational patterns, you’re building skills that will serve you throughout your entire trading career.
The validation process is crucial when you encounter new strategies. Before risking real money, test any new approach on historical data and in a demo account for at least 50-100 trades. Look for strategies that work across different market conditions, not just during specific periods.
Be especially skeptical of systems that show amazing results during only bullish or bearish markets, as these may fail when conditions change.
This doesn’t mean avoiding new ideas altogether, but validating them before risking money. You’ll often find that your best trades come from the simplest, most straightforward patterns rather than complex systems with multiple moving parts.
Tested setups give you a repeatable edge and remove much of the guesswork from decision-making. They also provide a foundation for gradual improvement.
Once you’re consistently profitable with basic patterns, you can add refinements and optimizations. But without that solid foundation, you’re building on quicksand.
When you commit to these pillars from the start, you create a sustainable trading approach. You’ll learn faster, preserve your capital through both winning and losing streaks, and build the consistency that separates long-term traders from those who burn out early.
Remember: All trading involves risk of loss. Never risk more than you can afford to lose.
After decades in the markets, we’ve seen that beginners succeed fastest when they start with strategies that are easy to follow, limit risk, and build confidence through repetition.
Below are four approaches that meet those criteria and can be adapted to fit different lifestyles and personalities.
Swing trading involves holding trades for several days to weeks to capture medium-term price moves.
It strikes the perfect balance for most beginners because it gives you time to think through your decisions without the pressure of split-second timing. Unlike day trading, you’re not glued to your screen watching every tick, and unlike long-term investing, you can see results relatively quickly.
This strategy focuses on capturing the natural rhythm of price movements as stocks and other instruments swing between support and resistance levels.
The beauty of swing trading lies in its forgiving nature. If you miss the exact entry point by a few cents, it rarely ruins the trade. If you’re stuck in a meeting when your alert goes off, you can usually still participate in the move when you check your phone an hour later.
This flexibility makes it ideal for people with day jobs, family commitments, or anyone who wants to trade without completely restructuring their life.
Most swing trades are based on technical analysis patterns that have worked for decades. You’re looking for stocks that have pulled back to logical support levels, broken out of consolidation patterns, or shown clear signs of momentum in a particular direction.
The timeframe allows fundamental factors to play a role too, such as earnings announcements or industry developments that might drive sustained price moves.
Example setup:
This setup demonstrates the classic swing trading approach of waiting for price to return to a proven support level and then looking for confirmation through candlestick patterns.
The risk is well-defined at $2.75 per share, while the potential reward is $5.50, creating a favorable 2:1 reward-to-risk ratio that allows you to be profitable even if you’re wrong 40% of the time.
Common indicators/tools:
Pros:
Cons:
Typical time commitment: 30–60 minutes per day
Swing trading offers the perfect entry point for most beginners because it balances opportunity with practicality. You get enough action to stay engaged and learn quickly, but not so much that you’re overwhelmed or glued to your screen.
The longer timeframes give you room to think through decisions and recover from small mistakes, while the proven patterns provide a foundation you can build on for years.
If you can commit to 30-60 minutes per day and have the patience to wait for quality setups, swing trading gives you the best chance to develop sustainable trading skills while protecting your capital.
Day trading is buying and selling within the same trading day to capture short-term price movements. Day trading can be extremely risky for those without experience or sufficient resources.
Day trading appeals to beginners because it offers immediate feedback and the excitement of active participation in market movements.
Every decision you make gets tested within hours or even minutes, allowing you to learn quickly from both successes and mistakes. However, this same immediacy that makes day trading exciting also makes it one of the most challenging strategies for beginners to master.
The fast-paced nature requires a completely different skill set than longer-term strategies. You need to make decisions quickly based on limited information, manage multiple positions simultaneously, and maintain focus for extended periods.
Mental stamina becomes as important as analytical skills because a moment of lost concentration can turn a winning day into a losing one.
Success in day trading depends heavily on understanding market microstructure: how orders flow through the system, where liquidity exists, and how different market participants behave at various times of day.
The first hour after market open and the last hour before close typically offer the most volatility and opportunity, but they also require the most skill to navigate safely.
Capital requirements for day trading are significantly higher than other strategies, not just because of regulatory requirements but because you need enough buying power to make meaningful profits on small price movements.
Commission costs can quickly eat into profits when you’re making multiple trades per day, so you need a strategy that generates enough edge to overcome these transaction costs.
Example setup:
This day trading setup shows how intraday traders use VWAP as a reference point for institutional buying and selling interest.
The tight stop-loss of just 70 cents limits risk while targeting a $1.50 move, but success depends on quick execution and the ability to exit immediately if the setup fails. The short timeframe means you’ll know within minutes whether the trade is working.
Common indicators/tools:
Pros:
Cons:
Typical time commitment: 2–6 hours per day during market hours
Day trading can be rewarding for beginners who have the time, capital, and temperament to handle its demands, but it’s not for everyone. The immediate feedback accelerates learning, but the psychological pressure can also accelerate mistakes.
Before committing to day trading, honestly assess whether you can dedicate several uninterrupted hours during market hours and handle the mental intensity without letting emotions drive your decisions.
If you decide to pursue day trading, start with a substantial demo account period and very small position sizes when you transition to live trading. The skills you develop can be valuable, but the learning curve is steep and unforgiving.
Trend following is trading in the direction of established market trends over weeks or months.
This is one of the most intuitive trading strategies because it aligns with the natural tendency of markets to move in sustained directions. Rather than trying to predict turning points or catch exact tops and bottoms, trend followers wait for clear directional moves to establish themselves and then join the parade.
This approach has generated consistent profits for decades because it capitalizes on one of the most reliable patterns in financial markets: the tendency for trends to continue longer than most people expect.
The strategy works because it aligns with human psychology and institutional behavior. Once a trend gets established, it tends to feed on itself as more participants jump on board. Momentum attracts momentum, whether driven by fundamental factors like earnings growth or technical factors like breakouts above resistance levels.
Trend followers don’t need to understand why a trend is happening; they just need to recognize it and position themselves accordingly.
Patience is the cornerstone of successful trend following. You’ll often endure several small losses while waiting for the big trend that makes your year.
The key is keeping those losses small while allowing your winners to run as long as possible. This creates a favorable risk-reward profile where your average winner is much larger than your average loser, even if you’re right less than 50% of the time.
The emotional challenge of trend following lies in fighting the natural urge to take profits too early. When a stock you bought at $50 reaches $60, it feels natural to lock in that $10 gain.
But trend followers train themselves to let winners run until the trend shows clear signs of exhaustion, even if that means giving back some paper profits along the way.
Example setup:
This example illustrates the strategy of buying pullbacks in established uptrends rather than chasing breakouts. The MACD confirmation helps ensure the overall trend remains intact, while the moving average provides a logical entry point.
The exit strategy is flexible, allowing the trend to determine how long you stay in the trade rather than targeting a specific price level.
Common indicators/tools:
Pros:
Cons:
Typical time commitment: 1–2 hours per week for monitoring and adjustments
Trend following appeals to beginners who prefer a more relaxed approach to trading and don’t mind waiting for the right opportunities. This strategy teaches patience and discipline while potentially delivering substantial returns when major trends develop.
The key is accepting that you’ll have extended periods with little activity and several small losses while waiting for the trends that make your year. If you can resist the urge to overtrade during slow periods and have the conviction to hold positions through normal pullbacks, trend following can provide a steady path to consistent profits with minimal time commitment.
Scalping is making multiple trades within minutes to capture very small price changes.
This strategy represents the most intensive form of active trading, where profits are measured in ticks and holding periods are measured in seconds or minutes.
Scalpers act like market makers, providing liquidity by buying at the bid and selling at the ask, or capitalizing on tiny imbalances between supply and demand. This requires lightning-fast reflexes, sophisticated technology, and an intimate understanding of market microstructure.
The appeal of scalping lies in its potential for consistent small profits that can add up over time. Instead of swinging for home runs, scalpers are content with singles and doubles, knowing that lots of small wins can compound into meaningful returns.
The short holding periods also mean minimal exposure to unexpected news events or overnight gaps that can disrupt longer-term strategies.
However, scalping is extremely demanding both mentally and technologically. You need direct market access, fast execution speeds, and real-time data feeds to compete effectively.
Even a few seconds delay in order execution can turn a profitable scalp into a loss. The strategy also requires significant capital because you’re working with small profit margins per trade.
Success in scalping depends on understanding order flow and market depth in ways that casual traders never need to consider. You’re essentially competing with high-frequency trading algorithms and professional market makers who have significant technological advantages. This makes scalping one of the most challenging strategies for retail traders to master profitably.
The psychological demands of scalping can’t be overstated. You need to make dozens of split-second decisions while managing multiple positions simultaneously. A moment of hesitation or emotional reaction can quickly turn a profitable session into a losing one.
Many scalpers burn out within months due to the intense mental demands.
Example setup:
This scalping setup highlights the importance of range-bound price action and volume confirmation for quick profits. The extremely tight stop-loss of 4 pips protects against large losses, but the small 6-pip target means you need a high win rate and fast execution to overcome transaction costs.
Success depends on recognizing when price is likely to bounce within an established range rather than break out of it.
Common indicators/tools:
Pros:
Cons:
Typical time commitment: 1–4 hours per trading session, often during the most volatile market times (such as the first two hours after a major market opens)
Scalping represents the most challenging path for beginners and should only be considered after mastering longer-term strategies.
While the potential for quick profits is appealing, the reality is that most retail scalpers struggle to overcome transaction costs and the technological disadvantages they face against professional market makers. If you’re drawn to scalping, start by proving you can be consistently profitable with swing trading or day trading first.
The skills required for scalping build on those foundations, and attempting to scalp without that background usually leads to rapid account depletion. Consider scalping an advanced technique to explore only after you’ve established a solid track record with more forgiving strategies.
The four strategies we’ve covered, Swing Trading, Day Trading, Trend Following, and Scalping, can all be applied to different markets.
At Profits Run, we often use options trading as the vehicle for these strategies because of the flexibility and built-in risk control options provide.
Options trading might seem intimidating to beginners, but when combined with solid trading strategies, they can actually make trading more accessible and less risky than buying stocks outright.
The key is understanding that options are simply tools that give you different ways to participate in price movements, not get-rich-quick schemes or lottery tickets as they’re often portrayed.
Many successful traders gravitate toward options because they solve several problems that stock traders face: limited capital, undefined risk, and inflexibility in different market conditions.
When you buy a stock, you’re committing a large amount of capital with unlimited downside risk if the company fails. Options allow you to control the same number of shares with a fraction of the capital and a clearly defined maximum loss.
The learning curve for options isn’t as steep as many people think, especially when you start with basic strategies that align with your chosen trading approach.
You don’t need to understand complex multi-leg strategies or advanced Greeks to benefit from options. Simple call and put buying, when combined with proper strategy selection and timing, can enhance your returns while reducing your risk.
Lower upfront cost gives you the ability to control shares of stock for a fraction of the price of buying them outright. Instead of needing $5,000 to buy 100 shares of a $50 stock, you might control the same 100 shares with a $200 call option.
This capital efficiency means you can diversify across more positions or preserve cash for additional opportunities. However, this leverage cuts both ways, so proper position sizing becomes even more critical with options.
The capital efficiency also allows you to test strategies with smaller dollar amounts while you’re learning. You can participate in moves of expensive stocks like Amazon or Google without needing tens of thousands of dollars per position.
This democratization of market access has made options increasingly popular among retail traders.
Defined risk becomes possible with the right strategies because you know your maximum potential loss before entering the trade. When you buy a call or put option, your maximum loss is limited to the premium you paid, regardless of how far the stock moves against you.
Built-in risk control can actually make options safer than stocks in many situations, especially for beginners who might not consistently use stop-loss orders.
Contrast this with buying stocks, where a company could theoretically lose 100% of its value overnight due to fraud, bankruptcy, or other catastrophic events. With options, your maximum loss is predetermined and typically much smaller than the equivalent stock position.
Flexibility in market conditions means options can be structured to profit whether the market is moving up, down, or sideways.
While stocks basically require upward movement to generate profits, options strategies can be designed for any market environment. You can buy calls in uptrends, puts in downtrends, or use more advanced strategies during sideways markets.
This flexibility extends to time horizons as well. You can trade weekly options for short-term moves or LEAPS (Long-term Equity Anticipation Securities) for longer-term trends. The ability to match your option expiration to your expected trade duration helps optimize your risk-reward profile.
To sum up the benefits of options:
Examples of strategy-option combinations:
A swing trader might buy a call option instead of the stock to participate in an uptrend with less capital at risk. For example, instead of buying 100 shares of a $60 stock ($6,000 investment), they could buy a call option for $300 that controls the same 100 shares.
If the stock moves to $70, the stock position gains $1,000 while the option might gain $700 or more, providing similar returns with much less capital at risk.
A trend follower could use longer-dated options (LEAPS) to ride a major market move without tying up large amounts of cash. LEAPS with expiration dates 6-24 months out give you time for longer-term trends to develop while preserving capital for other opportunities.
The key is choosing strikes and expirations that align with your trend-following timeframe.
A day trader can trade liquid weekly options to capture intraday moves without committing to overnight risk. Weekly options that expire every Friday provide excellent vehicles for short-term trades, especially around earnings announcements or news events.
The built-in expiration forces you to take profits or losses rather than hoping losing positions will recover.
Even scalpers can use very short-term options on liquid underlying assets, though this requires advanced understanding of options pricing and behavior. It requires focusing on highly liquid options with tight bid-ask spreads to minimize transaction costs.
Combining the right strategy with the right options structure is what makes this setup work. This doesn’t require learning dozens of complex strategies, but rather understanding how basic options can enhance your chosen trading approach.
By doing this, you can apply time-tested trading principles while using options to potentially reduce risk and free up capital for more opportunities.
The most common mistake beginners make with options is treating them like lottery tickets or trying to learn advanced strategies before mastering the basics. Start with simple call and put buying that aligns with your directional bias, focus on liquid options with tight spreads, and always understand your maximum risk before entering any position.
Next Step: If you’d like to see exactly how these beginner-friendly strategies work with options, get our free beginner’s trading plan. It’s the same step-by-step framework we teach in our courses, adapted specifically for options trading.
No matter which strategy you choose, certain rules apply to every successful trader. These principles are the guardrails that protect your capital, keep your emotions in check, and give you a framework you can improve over time.
They might seem basic, but violating any of these principles is often the difference between long-term success and early failure.
These principles have been tested across decades of market conditions and thousands of traders.
They work because they address the fundamental challenges every trader faces: managing risk, controlling emotions, and maintaining consistency. While markets evolve and strategies adapt, these core principles remain constant because they’re based on unchanging aspects of human psychology and market structure.
Decide how much you’re willing to risk before entering any trade. This means determining your position size based on your stop-loss distance and account size, not on how confident you feel about the trade.
Risk management ensures you can survive the inevitable losing streaks that every trader experiences.
Use stop-loss orders to automatically exit when the market moves against you, preventing a small loss from becoming a major setback.
Stop-losses serve multiple purposes: they limit financial damage, reduce emotional stress, and force you to define your risk before emotions take over. Many beginners resist using stops because they don’t want to “lock in” losses, but professional traders understand that small, planned losses are the price of staying in business.
The mathematical reality is simple: if you lose 50% of your account, you need a 100% gain just to break even. Lose 90% and you need a 900% gain to recover. These numbers explain why capital preservation must be your first priority, even above generating profits. You can’t compound gains if you don’t have capital left to trade.
Position sizing is the practical application of capital protection. Risk only 1-2% of your account per trade, regardless of how “sure” you feel about the setup.
This means if you have a $10,000 account and risk 2% per trade, your maximum loss is $200. If your stop-loss is $4 away from your entry, you can only buy 50 shares. This calculation must happen before you consider potential profits.
Use a demo account to get comfortable with your chosen strategy. Demo also helps you develop the discipline to follow your rules when money isn’t at stake. This practice reveals gaps in your strategy, helps you refine your timing, and builds confidence in your approach.
Treat demo trading like a real account by following the same rules, tracking results, and noting mistakes.
Many traders make the mistake of being careless with demo accounts because “it’s not real money.” This defeats the purpose entirely. The goal is to build habits that will serve you when real money is on the line.
Demo trading lets you build discipline before risking actual capital. You’ll discover how you react to winning and losing streaks, whether you can stick to your position sizing rules, and how well you handle the emotional aspects of trading.
These insights are invaluable and cost-free when gained through simulation.
The transition from demo to live trading should be gradual. Start with the smallest position sizes possible when you begin live trading, even if you were successful in simulation. Real money changes everything psychologically, and you need time to adjust to the emotional differences between paper profits and actual profits.
Your plan should define the setup you’re looking for, the entry point, the exit point, and the position size. A written plan is your roadmap for making objective decisions when emotions are running high. Without a written plan, you’re trading on impulse, hope, and fear rather than logic and probability.
The plan should be specific enough that another trader could execute it exactly as you intend. Vague statements like “buy when it looks good” or “sell when it goes up” aren’t plans; they’re wishes. Your plan should specify exact technical conditions, price levels, and risk parameters that must be met before you act.
A written plan reduces the temptation to make decisions on impulse by providing a framework for every trading decision. When you see a setup that looks promising but doesn’t meet your written criteria, the plan forces you to wait. When a trade moves against you, the plan tells you exactly when to exit rather than hoping for a recovery.
Review and update your plan regularly based on your results, but never change it in the middle of a trade. Plans should evolve based on careful analysis of your performance, not because you’re losing money on a current position.
The best traders treat their plans like businesses treat standard operating procedures: they follow them consistently and modify them only through careful analysis.
Fear and greed are the two forces that can derail even the best trading strategy.
Fear causes you to exit winning trades too early or avoid taking valid setups altogether. Greed leads to oversized positions, holding losers too long, or forcing trades that don’t meet your criteria.
Follow your plan, and let data rather than emotions drive your decisions. This means accepting that you’ll miss some opportunities because they don’t fit your criteria, and that you’ll take some losses because not every trade works out.
Emotional decisions are typically bad decisions because they’re based on how you feel rather than what the market is telling you.
Recognize your emotional triggers and develop strategies to manage them. Some traders take a short break after every loss to reset mentally. Others use meditation or breathing exercises before trading sessions. The specific technique matters less than acknowledging that emotions affect everyone and having a system to manage them.
Keep a trading journal that tracks not just your financial results but also your emotional state during trades. Note when you feel nervous, overconfident, or frustrated, and look for patterns. This self-awareness helps you identify when emotions might be influencing your decisions and take corrective action.
Master one or two indicators or chart patterns before adding more complexity. The trading world is full of sophisticated tools and advanced techniques, but beginners often hurt themselves by trying to use everything at once. Complexity doesn’t equal profitability; consistency does.
Layer on new skills only when you’re consistent with the basics. This means proving you can execute simple strategies profitably before attempting advanced techniques.
Many successful traders use surprisingly simple approaches because they’ve mastered the execution rather than trying to find the perfect system.
Focus on understanding why patterns work rather than just memorizing them. When you understand the psychology behind support and resistance levels, you can apply that knowledge across different timeframes and markets. When you understand why trend following works, you can adapt the approach to different assets and conditions.
Avoid “system shopping” where you constantly search for new strategies whenever your current approach hits a rough patch. Every strategy will have losing periods; the key is distinguishing between normal drawdowns and fundamental problems. Give any new approach at least 50-100 trades before evaluating its effectiveness.
At Profits Run, we’ve built our training around these principles because they create a foundation you can rely on, no matter how markets change. When you make them part of every trade, you put yourself in a stronger position to learn, adapt, and grow as a trader.
The best strategy for you is about how well it fits your time, temperament, and resources. A strategy that works for someone who trades full-time may not work for someone balancing a job, family, and other commitments.
Limited screen time means strategies like Swing Trading and Trend Following work well when you can check the markets once or twice a day.
These approaches don’t require real-time monitoring or split-second decisions. You can analyze charts before the market opens, place your orders, and check back after the close to see how your positions performed.
If you work a traditional schedule, trying to day trade during your lunch break or in stolen moments throughout the day is a recipe for disaster. Day trading requires sustained focus and the ability to react quickly to changing conditions. Attempting it part-time usually results in missed opportunities and poor execution.
Swing trading allows you to participate in significant price moves without sacrificing your primary career or family time. Most swing trading analysis can be done outside market hours, with position monitoring requiring only brief check-ins during the trading day.
A flexible schedule opens up more possibilities. If you can watch price action closely during market hours, Day Trading or Scalping may fit your style, but only if you can commit to the mental demands these strategies require. Having time available isn’t enough; you also need the temperament and skill set these approaches demand.
Even with flexible time, consider whether you want to spend multiple hours per day actively trading. Day trading can become all-consuming, affecting your relationships and overall quality of life if you’re not careful. Make sure the lifestyle implications align with your broader goals.
Personality fit is often overlooked but crucial for long-term success. If you prefer a steady pace, you might be more comfortable holding trades longer and focusing on big-picture moves. Some people naturally think in terms of longer-term trends and feel comfortable with the patience required for position trading.
Others enjoy quick decisions and thrive under pressure. Short-term trading styles could be a better fit if you thrive under fast-moving conditions and can make rapid decisions without second-guessing yourself. However, enjoying excitement isn’t the same as being good at managing it profitably.
Consider your stress tolerance honestly. Some traders find overnight positions stressful because they worry about gap risk or after-hours news. Others find the constant decision-making of day trading overwhelming.
Neither preference is right or wrong, but choosing a strategy that matches your stress tolerance improves your chances of consistent execution.
Your attention span also matters. Day trading requires sustained focus for hours at a time, while swing trading allows for more varied daily routines. If you get distracted easily or prefer variety in your day, longer-term strategies might be more sustainable.
Risk tolerance varies significantly among individuals. Some people sleep well knowing they have defined risk on each trade, while others prefer the unlimited upside potential of stock ownership despite the greater downside risk.
Understanding your natural risk comfort level will help you choose appropriate strategies and position sizes.
Account size affects which strategies are practical and profitable. Smaller accounts may benefit from strategies that require less capital upfront, especially when combined with defined-risk tools like options.
A $5,000 account faces different challenges than a $50,000 account, not just in terms of buying power but also in the impact of commissions and fees.
Options can level the playing field for smaller accounts by providing leverage and defined risk, but they require additional education and understanding. Don’t use options simply because you have a small account; use them because you understand how they enhance your chosen strategy.
Larger accounts can handle a wider range of positions and more diversification, but they also face different challenges. With more capital comes the temptation to take larger risks or the pressure to generate higher absolute returns.
The principles of good trading don’t change with account size, but the psychological pressures often do.
Technology requirements vary by strategy. Day trading demands fast internet, reliable hardware, and often multiple monitors for efficient execution. Swing trading can be done effectively with a basic computer and internet connection. Consider these costs when evaluating different approaches.
Education budget is another resource consideration. Some strategies require more extensive education and training than others. Day trading typically demands significant upfront learning and ongoing skill development, while basic swing trading can be learned more quickly.
Factor in the time and money required to become proficient with your chosen approach.
Your lifestyle shapes your consistency more than any other factor. When your strategy aligns with how you work best, it becomes easier to follow your plan, stick to your risk limits, and build the habits that lead to steady results.
The most profitable strategy is worthless if you can’t execute it consistently within your life circumstances.
Choose based on fit first, then optimize for performance. It’s better to be consistently profitable with a “less optimal” strategy that matches your lifestyle than to struggle with a theoretically superior approach that you can’t execute properly.
Success in trading comes from consistency over time, not from finding the perfect system.
The most important decision you can make now is to pick one strategy and focus on it for at least the next three months. Consistency and not constant switching between strategies is what builds the skills and discipline that lead to steady results.
Here’s how to move forward with purpose:
The goal is to learn a strategy and execute it with discipline in real market conditions. By approaching the process step-by-step, you’ll shorten your learning curve, protect your capital, and give yourself the best chance to grow as a trader.
Remember: All trading involves risk of loss. Never risk more than you can afford to lose.
Successful trading comes from building skill through consistent practice and disciplined decision-making. The most successful traders we’ve taught began with a strategy that fit their life, learned the rules inside and out, and committed to applying them trade after trade.
The four strategies in this guide, Swing Trading, Day Trading, Trend Following, and Scalping, are all proven ways to approach the market. Each has its own rhythm, risk profile, and learning curve, but all can be mastered by combining them with sound risk management and a plan you trust.
Approach trading with patience, safeguard your capital, and refine your skills one step at a time. Over time, your focus will shift from simply finding trade ideas to executing a well-practiced process. That’s when trading becomes a repeatable, confidence-building skill.
If you’re ready to significantly shortcut the learning process and begin trading ASAP, check out our trading programs today!
