One of the most well known trading styles is trading on news announcements. It requires a skilled mind-set to take advantage of the news in time, because they happen suddenly and move very quickly on digital media. Traders need to assess the news immediately after it’s released and make a fast decision on the trading asset.
When trading in financial markets, you will face many popular trading styles. Keep in mind that if a style brings good results for a trader, it does not mean that the same style results successfully for you also. In a few words, it is up to you and your circumstances which strategy to choose to trade with. Some factors are personality type, capital available, time available, knowledge and experience.
Trading strategies are fundamental tools for traders, designed for different styles and trading methods. Any trader needs to achieve profitable returns by applying any of them. A trading strategy will be effective if only it is applied with an accurate trading analysis, and it suits the trader’s mentality, goals, capital available, and trading knowledge.
End – of – Day Trading Strategy
Successful swing trading is based on how good the interpretation of the length and how long the swing took. This also defines the support and resistance levels. The swing traders will need to identify trends where the markets are rising or decreasing within the swing while observing trades.
The end-of-day trading strategy means that the traders open their positions when the market is about to close. End-of-day traders invest their capital when they are sure that the price settles down on a certain value. This strategy requires the studying of the asset price of the days before.
Day Trading Strategy
Day traders make the most out of the price fluctuations of the assets during the day long. Day traders keep open multiple trades during the days, but do not keep them overnight, because of the market volatility and overnight fees.
Trend trading consists of identifying a trend on the historical data of the assets, and checking why and when this trend (pattern) repeats itself. It is said that ‘trend is a trader’s best friend’. Trend traders have no clear view of where the market might go, in which direction. Success in trading means having the right system, which determines and follows the trends. It is very important to stay alert, because the trend can quickly change.
Position Trading Strategy
Position trading uses daily to monthly trading charts to determine the future direction of the currency market. This type of trade is kept open for several days, weeks and often longer than that, depending on the instrument trend. Trend traders usually open positions after the trend has established itself. They close the position when the trend breaks.
Scalping Trading Strategy
Scalping is a strategy usually adapted by daily active traders. It is focused on various price gaps caused by sell-buy prices and order movements. The strategy works by buying at the bid price and selling at ask price, to get the difference between the two prices. Scalpers hold their positions for short periods of time, decreasing the risk level related to this strategy.