Trading Strategies For Beginners
For those looking to beat the market, I have one thing to say: read on!
5/8/20241 min read
It sounds counterintuitive but the truth is that trying to outsmart the market with news headlines, social media, guy instincts always ends badly. You might get lucky on a couple trades but overall you will lose. Over 80% of day traders lose money over the long run. Even professional hedge funds with full-time teams, advanced data, and algorithms often underperform the S&P 500.
So what should you do? Stick to ETFs and rules based strategies.
Why You Don’t Need to Be a Stock-Picker
Well documented strategies like momentum investing will enable you to beat the market. You never need to pick actual stocks. Momentum investing is simple, systematic and proven to beat the market.
From 2010 to 2025, a basic 12-month momentum strategy on large-cap stocks delivered annualized returns of ~13–15% vs. the S&P 500’s ~11%
This is non-emotional, rules-driven strategy. The algorithm doesn't go by "feel" it moves systematically.
ETFs: The Smarter Play
An even easier strategy is ETF investing. No work required!
QQQ (Invesco Nasdaq-100 ETF): QQQ has compounded ~17% per year since 2010. Turning a $10,000 investment into over $95,000 by 2025.
SOXX (iShares Semiconductor ETF): The semiconductor sector has been even hotter. Going into one sector is riskier but over the last 10 years, SOXX has returned ~25% annually. A $10,000 investment in 2015 would now be worth more than $93,000.
You just buy and hold. You let the market do its thing.
Final Comment
Beating the market is not “hard” but it is hard if you trade on your own.
Instead of trying to outguess Wall Street put your money into a rules based strategy or buy ETFs. Then let compounding do the heavy lifting.