Always implement a good strategy

Make the most out of your trading strategy, change and adapt it during the time

Trading financial markets requires putting together many factors to create a strategy that works for you. There are many strategies you can follow, however it is crucial to understand and be familiar with the strategy. Every trader has unique goals, level of knowledge, sources of information and time available to trade, so adapting a strategy which covers their uniqueness is the first step towards success. Compare strategies based on three criterias: time resource required, how often trading opportunities come and the distance from the target. Position trading is usually the highest risk reward ratio, the scalping strategy demands more time because of the high frequency of the positions being placed on a daily basis.

 – TREND TRADING STRATEGY  – 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 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 – Position trading uses daily to monthly trading charts to determine the future direction of the currency market. This type of trades are 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.

 – DAY TRADING STRATEGY – Day trading is the most popular trading style. It is differently called ‘active trading’. It consists of buying and selling the asset within the same day. Every trade which is open during the day, is closed before midnight. This strategy is usually a choice of professional traders, who knows when to react and how. However, since there is a trading platform available online also, even new traders can apply day trading.

 – FOREX SCALPING 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.

 – SWING TRADING – Swing traders start the game when a trend breaks. Everytime a trend breaks, some price volatility comes into light. Swing traders go long or short while that price volatility is setting itself. The swing algorithm does not need to be exact and predict the maximum of a price move, it just needs a market which moves in a certain direction.

 – CARRY TRADE STRATEGY – Carry traders are about buying one asset at a lower price and following it with another buying action of another currency at a higher rate. This action usually results in a positive carry of the positions. Carry strategy is mostly used in the currency pair market. The length of the trades is dependent on the interest rates movements of the currencies you choose to buy, it might go even to weeks, months and maybe years.

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