Active Trading Strategies

It is always good to choose your trading strategy. i.e. (the strategy that best suits your style). Another essential thing to be noted while selecting a strategy is how you can take a risk.

Long-term traders buy and hold on to their stocks for a number of days or months.

Short-term traders book their profit/loss within a few days. Traders who actively trade in the financial market adapt to the market movement and use the trading strategies to maximize profits.

Day Trading Or Intraday Trading

Day trading is also known as intraday trading. Here the trader takes a trade and gets out of his position before the market ends. He is out of his position during market hours and does not carry any overnight positions. This is one of the most active trading strategies. Professional traders prefer day trading. The gains from a day trade may be limited, and the trader may not be able to catch a significant movement in a trending stock. There is no risk involved with the risk of events that may affect the stock price after the market hours.

Positional Trading

Positional trading is holding on to positions for days or even months. They usually grasp the start of a trend and hold on to the stock until it breaks. This kind of trading strategy allows the trader to capture huge profits if the price moves in his direction. He can also capture the gains from gap-up openings during the pre-market hours. The trader will always be worried about any unexpected news or events during the nonmarket hours.

Swing Trading

Swing trading is a technique to generate profit from price changes or stock swings within one or several days. Swing traders are not usually concerned with the built-in value of the shares. Instead, they focus on the price trends of the shares determined by technical analysis of stock market charts, which help them identify the stocks that have some price momentum.

Swing trading is similar to day trading and is speculative-based trading that relies heavily on the market trend and technical analysis for successful trading.

Scalping Trading Strategy

Scalping is a very active trading strategy usually done by traders looking to capture small price movements in a stock. They try to capture the spread that causes price gaps. The Scalping strategy is followed by aggressive traders who catch even small price movements and expect huge returns.

Fading Strategy

In this strategy, traders short the stock after it moves up rapidly. They assume that the stores are overbought and that those buyers who may have taken the stock early would start booking profits. Although the risk is involved in this strategy, it is also very rewarding.