Best Strategy For Living Trading?

There are 3 main trading styles or strategies. Stock Trading strategies are scalping, day trading and swing trading. We are going to review them to try to define which one is best suited to a living trading project. We will also see the cases of copy trading and long-term investment.

Scalping

Scalping is a trading strategy in which traders (called scalpers). Aim to make profits from relatively small price changes. Scalpers often open and close a large number of positions in a single trading day, aiming for several small gains.

They also enter and exit the financial markets in a short period of time. Which is usually a few seconds or minutes (but the maximum is a few hours). And these traders are known to use higher levels of leverage.

The main advantage of ,scalping is the ability to profit from small price. Changes in the shortest possible time frame, which is often magnified by a larger position size, enabled by leverage.

In the most extreme cases, trades are opened and closed within seconds. If enough price movement has been made. Due to its fast-paced nature, traders must be precise in their timing and execution.

Scalping is certainly one of the riskiest forms of trading. Stock Trading strategies that requires the most skill and composure.

day-trading

Many traders think day trading and scalping are similar. Although both trading styles take place on the same day. There are important differences that we should point out.

Day traders open and close far fewer positions than scalpers. These traders sometimes open only one trade per day. And often no more than two to three per trading day.

The day trader’s strategy is to focus on the best opportunities of the day and aim for a bigger profit target.

Therefore, a day trader typically holds a position for several hours, but no longer than a full trading day.

Ultimately, the goal of a day trader is to aim for a larger share of the expected daily price movement during a trade.

Swing Trading

The last style of trading is called ” swing trading “, which is a trading system in which traders enter and exit positions sporadically, which are usually held for a few days or weeks.

Swing trading is a system in which traders target medium-term trading opportunities, and is different from intraday trading.

CopyTrading

Copy trading consists of automatically copying and replicating the investments of another trader, who is supposed to be experienced and recording consistent gains.

This copied trader can use a certain strategy, scalping, day trading, or even swing trading, which is generally described by this one.

While copy trading can be interesting for a novice trader to get started, one can seriously question whether it is viable to follow another trader’s trading plan and risk management strategy.

Indeed, this would amount to putting its main income in the hands of other people!

Long Term Investment

Investors with larger capital and who seek to take a little less risk in the stock market, often opt for long-term stock market investment .

This mainly consists of selecting stocks and ETFs to buy and hold for the long term in order to benefit from possible increases in their prices, as well as dividends if there are any.

It is a less risky investment approach, because it does not use the leverage effect, and in the long term, investors are more likely to see prices progress, even if nothing is guaranteed. . Read More: Stock Trading Education