4 trading strategies of trading STOCK MARKETS
Welcome to reality!
So, why does a trader need to differentiate between strategies? Is not it easier to trade “as the soul goes”? Today it is, and tomorrow is different. Could not close the “plus” inside the day, try at five-minute? Well, firstly, on the stock exchange you can not hope for a chance. And secondly, there are no unprofitable deals except that the elected hacker Neo, and even then, with the permission of the all-powerful agent Smith. It is possible to judge the absence of losses only over a long period of time, according to the figures printed in the tax return.
The instinctive desire for systemic
Any meaningful trade is the result of thoughtful actions , erected in a simple and understandable system. Accordingly, strategies are needed in order not to trade haphazardly. This is obvious to a professional trader, and it is necessary to understand the newcomer, starting with the first deals.
The choice of trading strategy often occurs instinctively. A person builds on personal preferences , reading skills, ability to understand news, analyze indicators, build levels. Someone prefers not to drag out transactions with which “and so everything is clear,” someone likes to saddle the trend, and squeeze out of it a maximum. Not the last role here is played by the feeling of psychological comfort, the conformity of the strategy to the goals set, financial priorities.
Take for consideration 4 basic strategies based on the length of the transaction .
1. Scalping
The most short-term transactions, calculated on the extraction of profit from the minimum price movements. The bloodthirsty habit of the native inhabitants of America, removing hair from the head of the enemy with the skin – the scalp, arises in memory is not accidental. Scalpers in trading also operate in the style of a sudden raid. They fly on stocks with fast dynamics, immediately remove the tops (or roots), and disappear. Scalping time rarely exceeds half an hour. Most often, scalpers take their share on minute charts.You can argue that you will not make a big profit in this way, but if you take ten thousand shares, and take 0.3 cents off each … Can you catch the thought? Some scalpers manage to earn more than a few long-distance lovers in several hours of work. This strategy is sometimes called “pips”, from the word “pip” – an item on the chart.
2. Day trading (intraday, intraday)
The strategy, which provides for the conduct of transactions within a single trading day. Typically, day trailers take hours to get the most out of the traded instruments. Of course, this is preceded by premarket analysis, and careful selection of shares. When the trading day comes to an end, all transactions are closed
3. Medium-term trade
In this strategy, the life expectancy of an open transaction increases to several days, in order to increase the possible number of points won. Mid-term audiences are more likely to rely on technical analysis than fundamental analysis, but there are exceptions. Statistics say that this strategy has the most widespread among traders. However, in order to “pull out” this strategy, the trader will need several times the size of the deposit, rather than inside the day.
4. Long-term trading
Adherents of this strategy should have iron nerves and reliable financial back. They carefully study the news of economics and politics, follow the stocks before opening them, and calculate the probabilities of movements. The long-term may well take 2-3 transactions and lead them for several weeks, or months. If the tendency is “read” correctly, then the difference on a decrease, or increase, will pay off with interest. If a long-term trader does not understand the deal, or if the Market has given him a “surprise” – he will receive a proportional loss.
Find and do not give up
Usually, if the chosen strategy brings profit, it is not changed. But there are exceptions. The medium-term can be reduced to daytime, just like a runner-runner can go to sprint.