An Insight Into Active Trading Strategies

Trading is an exciting platform to earn money. Some people take this as a profession and earn profits while some consider this an investment or a part-time job to earn money. Trading can be for short-term or a long-term depending on the requirements of individuals/traders.

An active trading is an art of buying and selling of securities based on the short-term price movements resulting in profit out of such movements. There are various trading strategies to execute a trade considering market conditions, demand, risk, price etc.

An example for active traders includes Crypto Code trading robots. They analyze the market strategy, price movements, market trends, profit factor and trade in the market to get a potential return.

Below are the different types of trading strategies commonly used by the active traders:

  1. Day Trading: Undoubtedly, the most common active trading strategy. Day trading, as the name itself speaks, is a method of buying and selling of securities within the same day. This may be of any kind. The trades are closed within the same day and nothing is carried overnight. This trade is normally executed by professional traders, market makers etc.
  2. Position Trading: This is normally called a buy-and-hold strategy. This is based on the concept that the price movements of securities in the long term will overweigh the price movements of securities in the short term thereby, ignoring the concept of earning in short term. The traders in this market use long-term charts i.e. period to period to analyze the market strategy, trend, market direction to gain a successful return. These traders determine the market trend and trade based on the same instead of price movements.
  3. Swing Trading: Typically, how a swing moves up and down, swing traders buy or sell when the prices of the securities are highly volatile. Normally this happens between the end of a particular market trend and before the beginning of another market trend. Swing traders usually hold securities more than a day but shorter than the position traders.
  4. Scalping: Scalping involves exploring various price movements caused by put and call /bid and ask spreads and trading on the same. Meaning, these traders usually profit trade by buying at the bid price and selling at an asking price. Scalpers hold investment/securities for a short period in order to mitigate the risk with their market analysis. Scalpers generally profit by small volumes rather than trading on the difference between high volumes and moves. Comparatively, the profit gained by scalpers in each trade is lesser than the other active traders as the volume is small/very low.

An active trader can apply any of the above strategies for gaining a profitable return. However, one must do an intense research on the risk, cost, market and profitability factor before exploring any of the trade strategies to benefit a smooth return.