Trading Strategy Trends To Note For Beginners
To maximize profits and make the best out of a business deal can become a Herculean task for uninformed traders trying to navigate the financial world. The markets and trade world is littered with traps, scams, and ventures that are programmed to fail from the start; some are risk cluttered endeavors ready for an investor who would input and lose all assets. It also does not ease things to know that there are thousands of people in the business world, doing the same things as you, the same way and with the same intention, which is to make profits. How then can we make the best out of our minute allocated space in the global financial world? The answer lies in Trading strategies.
What are trade strategies?
Rather than jump straight into the ocean, let's start with a pool level. What is strategy? A strategy is a plan designed to achieve a goal. A Strategy is a finished decision array selecting why, where, when, and how to execute functions towards realizing goals. Strategies are an essential presence in the mind of a goal getter, and their importance cannot be over-emphasized. A life without plans is a life out of order, and a precarious life to live because it is prone to have a lot of errors and losses.
The same life principles apply to trade.
Trading has kept a pure definition across genres, purpose, time, and society, and it has been known age-long, as exchange.
From the basic kinds of exchange, like exchanging words to the more complex ones like the exchange of organs, every transaction has a strategy. Each strategy is unique to its goal and to the kind of trade it functions with. In other words, the strategy for Bitcoin trading would be different from that of day trading.
Therefore, a trading strategy is a plan that is designed using assets, capital, revenue, tax rate, et cetera to determine the right market choices to yield results. Although it sounds more talk than action, trading systems determine money management, time management, budgeting, investments, and other business needs. Trading strategies are based on internal and external factors in a market such as a trend, competition, demand, production, and supply, and is usually tested to determine feasibility.
If you are interested in making a profit from a venture, you must have a trading strategy that puts the following questions into consideration:
1. Why am I doing this?
2. When can I do this?
3. Where is the perfect place for me?
4. What is the current market situation?
5. How do I make the best of this?
These are the five most crucial questions that traders can ask themselves and are in the act, ranked the most critical questions in Economics. However, beyond these, there are guides for trading strategies, especially for beginners.
Top Trading Strategies
If you have ever had to research about trading strategies, you'd learn very quickly that there are several guides to trading depending on the kind of trade. From Bitcoin to stocks and investments, each field has its own unique strategies. However, there are four constant and popular trading strategy guides, and they are; swing trading, position trading, day trading, and scalping.
These strategies are active trading strategies and applicable to a wide range of trade, including cryptocurrencies like Bitcoin, Ethereum, and likes.
Cryptocurrency trading strategies would perhaps be the best way to explain trading strategies, not only because it has expanded into a digital market space globally but because it follows every market rule in the book.
Some crypto trading strategies, popular and rare include:
The holding strategy is the simplest Bitcoin trading strategy, as all it requires is, to buy a particular amount of cryptocurrency, and leave it to grow without occasional checks. In trading like this, although the market is susceptible to lose, you end up gaining profits with patience. However, this involves a long waiting period, which might be impractical with other trade kinds.
Day trading is the exact opposite of the holding strategy and the most practiced method in the food markets and labor markets. It is to trade or buy within the limit of a day, leaving no room for spillover transactions. The downside of this method is that one can suffer extreme loss in one day and extreme profit. Asides the demerits, it is a professional trading strategy.
The Scalping strategy is more linked to money markets, especially the cryptocurrency market, because it relies heavily on micro-fluctuations of the market rates. It is faster than day trading and riskier and is also used majorly on high amounts of capital. Since most crypto markets are highly unstable, this method works well, except for Tether (USDT) and True USD - the stable markets.
Due to high-risk potentials, it is crucial to use risk indicators such as Bollinger bands and volatility indexes for beginners in this trading strategy.
If you are interested in a low-risk trading strategy, then the swing trading strategy is a preferable option. This strategy is beginner-friendly as it reduces loss potential, and helps the trader make the best possible choice from technical and fundamental studies within a short time.
Swing trading is one of the safest strategies as it sits on the fence and presents you with reasonable measures of all others. It is never too short nor too long, while day trading is bound to a 24-hour cycle, swing trading exceeds that but is never as long as a month or a year, unlike trend or holding trading strategy. Also will this method, your profits would not be big, neither too small, and this makes it perfect for beginners in the cryptocurrency market and every other finance market.
This is otherwise known as trend trading which relies on a passive style of position in order to reduce loss by extending the trading period. Although this trading strategy might not involve waiting for years, it still involves waiting for longer than a week. This trading strategy is somewhat passive but remains a strategy that takes into account, fundamental, and technical analysis. This method studies the market data and jumps on the perfect trend to make profits. They simply ride on the highs and lows of the market.
Regardless of whichever trading strategy one uses, pending on this case sample and others intended, it is important to pick that which is suitable for one's business and plan. Remember to cut your coat according to your size and always; ask the five essential questions. why, when, where, what, and how.
BitForex is an exchange service platform that can be classified as one of the Top 10 cryptocurrency exchange services. It is focused on providing millions of users with a digital currency trading and investment tool that is not only safe but also professional and convenient. BitForex has a high customer-oriented culture and state-of-the-art financial technology.
BitForex is programmed in a way that it can quickly adapt to the changes of the Crypto market while introducing new features like margin trading, enhanced trading charts, derivatives, and a host of others. The headquarter of BitForex is located in Hong Kong, while there are branch offices in countries like the United States, South Korea, and Singapore.