Good investors need good trading strategies. It cannot be copied (except at social brokers like eToro) and is adapted to the trader’s profile and personality. You must also take into account a number of signals that can be detected in analysis tools and economic publications. Here are 4 excellent trading practices that brokers often use.
Traders particularly like this investment method. Suitable for beginners, no special knowledge is required. Day trading consists of making as many small trades as possible in one day and closing the positions before the end of the market. The profitability of this strategy depends on the accumulation of a large number of small profits. Investors pay attention to small price changes in currency pairs to get the highest returns on the same day.
Once reserved for professional brokers, technology has entered the world of individuals. With the help of online trading platforms, anyone can practice day trading at home. It is advisable to be cautious and watch out for any small signals.
The second investment method is also suitable for novices because it is not based on a thorough technical and economic analysis. Swing trading is based on a simple principle: find a clear market trend and speculate on its direction. The position is closed when the trend starts to fall, so it is not necessarily the same day. Unlike day trading, this strategy is based on long-term profit goals. Brokers take the time to perfect their analysis and define positions at the right time. The chances of success in swing trading are generally higher than in day trading.
The scalping method is very similar to day trading. The general principle is similar: short-term operations, many sources of small profits. Leverage is high and revenues must be reduced in time. Brokers use scalping to find extreme prices in the foreign exchange market. The goal is to make several trades per day. This method of trading requires to be very active in a short period of time, from a few seconds to a few minutes. Scalpers are constantly analyzing the charts to get the most out of them.
This very interesting strategy is based on positions contrary to the trend in assets. Traders should pick up weak signals and expect a reversal. This type of activity requires special psychology. The reasons that push brokers to adopt this strategy are often not positive: the trader thinks he is better than others, thinks that his income is much higher than that of his colleagues, or he is attributed a strong ambivalence. When it is well combined, it can be very useful. You need to identify the movement by analyzing the trend graphs. Signals are not necessarily subjective, but come from specific price factors or economic indicators.
Here are 4 fairly simple and powerful trading strategies. We recommend that you try several of them to find the best method for your profile.