Trading tips: Four Popular Active Trading Strategies you can adopt in today’s Market -

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Trading tips: Four Popular Active Trading Strategies you can adopt in today’s Market

Trading tips: Four Popular Active Trading Strategies you can adopt in today’s Market

You probably already know what active trading is. Just as a quick refresher, though, active trading is the buying and selling of securities based on short-term movements of the market.

It is a way to profit from the price changes in a short-term market chart. Trading could be from the one minute chart (M1), the five minutes (M5) or the fifteen minutes chart (M15).

Active trading is not the only trading strategy there is. There is also a buy-and-hold trading strategy that deals with full long term entries in the market. It is a common technique among passive investors.

So, what strategies can you take to be profitable in your active trading? Let's get right to it.

  • Day Trading

Day trading is one of the most popular active trading strategies among traders. It's as the name implies. You buy and sell your securities on the same day. You close your trade
positions on the same day as you enter them. It never extends to the next day.
Professional traders usually did day trading, but now, electronic trading has created the room for everyone to be a day trader. Before you adopt this strategy, make sure you're quite good at recognizing market movements.

  • Swing Trading

Even more impressive is the Swing Trading Strategy. Swing traders understand that the market is usually volatile at the end of a trend. Therefore, swing traders make their
entries when a pattern breaks, and another is trying to establish itself. They make use of advanced technical and fundamental analysis to determine their points of entry. The downside of this trading strategy is that a new trend might not be established as
anticipated. The market may continue in consolidation instead of going with another significant trend.

  • Position Trading

The position trading strategy involves jumping on already established trending markets and capitalizing on the trend. The trading strategy is kind of tricky. A lot of traders like to classify it as the buy-and-hold strategy, while some other traders describe it as active trading. Why? Because position trading makes use of longer-term charts. These charts could be anything from the daily chart to the monthly chart. Trading time with the position trading strategy may extend for several days or weeks. It all depends on the trend.

  • Scalping

The Scalping strategy is the most popular among most retail traders because it allows
traders to capitalize on the smallest changes in market movements. Scalpers, as they are called, generally attempt to hold a position for as short as they can while taking the
maximum profit.

As a trader, you can adopt any one or more of the four strategies in your trading. However, please be sure you understand the risk associated with each plan before you adopt them. The best way to choose a profitable trading strategy is to practice as much as you can. Try everything- the buy-and-hold strategy, active trading strategies. Explore and discover the benefits and disadvantages of each trading strategy. Good luck!

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