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Monday, 30 March 01:41 (GMT -05:00)



Foreign exchange market

Trading Approaches, As Seen By Professionals


Each and every trader out there should choose the right trading approach that will suit them best. Trading experts say that are 6 trading approaches:
 
1. high-frequency trading
2. scalping
3. day-trading
4. swing-trading
5. mid-term trading
6. long-term investment
 
Without further ado, let's go ahead and take a closer look at each of them.
 
Let's start from high-frequency trading (HFT). This one is all about a huge amount of quick trades. The goal is to profit from rapidly changing quotes. The trading approach requires lightning-fast reaction and constant monitoring. Such trades often last less than a second. So, how is it even possible to trade this way?
 
High-frequency trading is outsourced to robots. They make life easier since those robots can trade 24/7 and you don;t need to supervise them. Still, such a robot needs to be created, tested, and set up before being available for use.
 
Scalping is more like HFT but the lifetime of a trade is longer - from a couple of seconds to a couple of minutes. Scalpers trade manually for the most part. In this case they are forced to spend quite a lot of time monitoring the market, opening and closing trades. Some of those trades are losers, the rest of them are winners, but the key thing is to make so that your winners eventually outperform your loosers.
 
Кластерный график с таймфреймом от 1 секунды до 3-5 минут
 
Most scalpers are beginning traders with a relatively small amount of money dedicated to trading. Basically, they are trying to make money quick at the expense of turning over the capital multiple times over a relatively short period of time.
 
Day-trading is yet another approach to quick trading, even though the frequency of trades is far less considerable. Apparently, since this is day trading, all of the trades are opened and closed within the same trading day. More often than not day traders are content with making under 10 trades a day. If that figure is more substantial, that's probably a scalper. The less trades they make, the more time they have to perform decent analysis. Such traders cannot afford to get distraced for a long period of time if they count of decent gains.
 
Swing-trading is about working on bigger-scale time frames. Those trades live longer, which is why they don't require to be watched as often as previous examples do. The swing trader's lifestyle is more relaxed and flexible, and can be often combined with a full-time job. Trades are often held open for a period ranging from a couple of days to a couple of weeks. Since these are longer-term trades, they are far less numerous, which is why swing-traders is often for those who have bigger amounts of money to invest in their trading activities to gain enough money for their living.
 
Mid-term trading is all about holding those trades for months. Such trades have enough time to perform decent analysis and make well thought-out trading decisions. This is not the best approach for a small budget. You cannot consider any serious trading with 200-500 dollars at a win rate of 10-20% within a couple of months.
Успешный среднесрочный портфель
 
Long-term investors are patient enough to hold their investments for 5-10 years. They aren't afraid of temporary drawdowns because they are convinced in the positive dynamic of the asset in a more distant future. Usually, those investors load up on dividend stocks and enjoy regular dividend payments on top of holding their assets. 
Наиболее удачная инвестиция
 
The bottom line is, whichever approach you choose, there is a decent platform named ATAS, which can become your trading and analytics partner in the trading world. 

 

You are free to discuss this article here:   forum for traders and investors

 

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