Styles And Methods Of Trade

The style of trading for each trader's unique. The style of the trader's trading on the exchange depends on its initial experience in the management of money and the value of money in his life.

There are many trading styles, but that does not mean that traders are not able to go against their natural preferences, and does not imply that the choice of trading style over another can not be changed.

There are many ways to describe the style of trading. Some people define it markets in which they sell or exchange and the goods they sell. Others use fundamental or technical division, who is described this trade types, such as spreads or options. Further, the different styles, methods of trading:

- Method skalpirovaniya
- Trading on momentum
- Technique
- Trade in mezhrynochnom spread
- Trade in Arbitration

Method skalpirovaniya
Method skalpirovaniya is buying and selling market instruments many times during the day with a small surplus, which in general is a huge profit. This method is not based on profits, at the same time the possibility of loss is much less, so it is fairly safe method.

Traders at skalpirovanii boosting profits on small movements and trade, analyzing one - five-minute intra-day charts, with the duration of the position a few minutes, and a very small profit per transaction. The open positions will not be transferred to another day.

Trading on momentum
The basic idea of trading on momentum is that the rising market-based instruments will continue to rise, and falling further to fall. Trading on momentum requires some of the most common analytical skills.

The basic principle is that you do not buy a market instrument at a minimum, and sell at the maximum. If you do not buy an instrument until you see that he has begun to rise, it means that you missed the opportunity to buy it at the bottom. Similarly, if you do not sell the tool as long as you do not see that it declines, then you missed your opportunity to sell it at the top.

The main technical indicators is a dynamic indicator that accumulate the net change in prices closing tool in a series of fixed intervals. Pulse line is constructed as a tandem line to the price schedule, and shows the zero axis. Positive values indicate upward movement supported, and negative values indicate potentially supported by downward motion. Pedigree or downward direction of the indicator shows "strong motion" tool.

When a trader is confident that he has identified a strong movement of market-based instruments, it carries out the transaction. Skipping the first one or two ticks of motion does not matter, because he was willing to undertake the purchase (or sale) for one of the following periods of momentum.

Trading on momentum is also fraught with dangers that can easily destroy even well-disciplined and knowledgeable trader. With proper understanding of technology, sufficient knowledge of the risks and the willingness to take against accidental loss, momentum trading can be attractive for aggressive traders who like to balance on the edge.

Technical method
Technique applies to all market-based instruments, and is aimed at quick profits. Technical traders assess the history of the company (in the case of shares), analyze the charts and price movements, estimate the trade model in the past and on this basis, predict what may happen in the future and may even trade volume during the period of time.

Technique involves the study of price dvizheniyai trade volumes to determine the model type of head and shoulder, and other formations. Other indicators include the levels of support and resistance, moving averages, etc.

The main disadvantages of a technical method
The main drawback of this method of trading are:
Too much dependence on the past behavior of market-based instruments.
Many technical indicators. There is no ideal indicator for each market instrument.

Trade on spreads mezhrynochnom
Trading on mezhrynochnom spread consists of a long position in one market instruments and short position in another instrument, they are closely linked. The logic at work mezhrynochnom spreads is that the purchase and sale of two different tools to effectively use the correlation between them. Trading on mezhrynochnom spreads felt very difficult because it requires transactions in different markets. Used mainly for commodity futures contracts.

Trading on Arbitration
Also known as "profit risk", the trading system through arbitration is done through the simultaneous purchase and sale of market-based instruments to make a profit from the differential in price. This trading system is usually applied on different exchanges or trading platforms. An investor can earn on the difference in prices of market-based instruments at two different markets due to exchange rate fluctuations.

For example, a trader buys a stock on a foreign stock exchange, which is not adapted to the constantly changing exchange rate. He buys undervalued stock and re-sells the stock, thus earning revenue from the margin.

Another way to trade on the arbitration is that the investor wants to sell a market instrument for a certain price. He places an order to sell at that price and at the same time places an order to buy at higher prices. As a result, other investors can then buy an instrument for the first price, the temptation of higher prices offered in the second warrant. As soon as the first order for the sale is executed, the investor cancels the second warrant to purchase. Thus, he not only gets rid of its non-liquid assets, but also makes good money on this.

Trade in arbitration is usually practiced by large institutional investors with a multimillion assets. Trade for arbitration is most effective at nizkolikvidnyh markets.

Forex Magazine
based on day-trading-strategy.com