Short Term Trading Strategies

Trading

Shortterm trading strategies with their own nature are expected to generate rewarding returns over a succinct investment period. Here we will look at three short term trading strategies and try to give some insight to the advantages and weaknesses of each personality.

Commodity

Investment would be the old standby of long-time traders. The olymp trade forex market is and has been well created using profound liquidity for many years and because of this is the most popular vehicle for quick gains in the industry. It makes sense exactly what the advantages are with the platform – namely the liquidity, higher name recognition, and broad number of assets to purchase and sell.

The principal weakness of this stock option strategy is that the high level of competition on a number of the resources (that’s partially offset by the low spreads on those stocks). The other problem it is possible to run into with less-competitive securities is the fact that spreads widen and also finding a profitable exit strategy grows harder. Then there is also the potential issue of automatic implementation of just in the money contracts at expiration leading to account destroying margin calls.

High Frequency Trading Systems

HFT systems are server-based programs which rapidly buy and sell securities using computer algorithms to predict market movements and implement trade orders automatically. Many programs outthere operate thus quickly in the trades which the purchase rate is measured in orders per micro second. The benefits of working with a system similar to this will be the ability to front-run your transactions in front of other traders and computers in the marketplace. This creates tiny profits for every single position bought (and presumably immediately sold). Short term trading strategies such as this truly will be the gold standard in regards to shortest duration.

The problem with this kind of style is which you are entering a never-ending arms-race with different traders and investment banks. There’ll often be a larger bass, with more funds, and better programming. While no machine may acquire all of the actions, smaller capital firms will get pushed to the margin where ultimately activity is no further justified by the returns.

Binary-options

The final of these short term trading strategies that I mention here is using binary alternatives. These types of contracts are now tremendously popular amongst low-income traders awarded their high returns and low trade costs. It is possible to trade profitably with just as low as $100 at some brokers. The drawbacks to using short term trading strategies involving binary options consist of small order sizes (typically less than $3000 per trade), limited asset selection (only the liquid assets have been traded), and limited means of leaving trades once implemented.