Case Study: Solo E Create How to Create a Trading Strategy
How To Create A Trading Strategy – Affiliate Swaps x Solo E
Forex and crypto influencer Solo E is down with another video in conjunction with Affiliate Swaps! This time, he’s diving into the need for a trading strategy and tells you how you can design one yourself. A trading strategy, in his eyes, is a must for every trader who wants to make good money in the markets. No matter if your trades are in stocks, currencies, or crypto – a strategy will help you know when to enter the markets, how long to stay, and when to exit. Get the details from the man himself as you watch the video.
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The way to protect your portfolio from outsized risks is to design a clear and robust trading strategy
What is Trading?
Trading is an active financial strategy that refers to holding positions for a relatively short time, from minutes to a few weeks. You can trade virtually everything in the global marketplace, from stocks to cryptocurrencies and commodities such as gold and oil.
Trading is generally considered a riskier approach to markets. Therefore, it is recommended you use a stop loss order that would protect your portfolio from unwanted risks. On the other hand, a main advantage in trading is the ability to go short, i.e., sell a financial asset and profit from its decline.
Those market participants who practice trading are called traders. Their aim is to ride short-term trends and catch price movements that can yield attractive returns in the near future. Traders usually employ a variety of tactics and techniques when trading in the financial markets.
In order to assess where to jump in next, a trader looks at market news and upcoming reports, as well as chart formations and price behavior. These two, fundamental and technical analysis, are the basics of almost every winning trading strategy.
Trading Strategy as a Portfolio Protection
The way to protect your portfolio from outsized risks is to design a clear and robust trading strategy. A solid trading strategy, on this note, will help you stick to a plan, or a set of rules, that will help you get the most profit with the least amount of risk.
Ideally, your trading strategy should be tailor-made to fit your trading style, risk tolerance, and overall approach to markets. You can, of course, seek traditional trading strategies which would likely say you need to diversify and never risk more than 2% on any given trade.
So, what’s an outsized risk? This is the amount of funds that you have not planned to lose. In other words, losing more than you can afford. In turn, this could make coming back to your starting point increasingly more difficult.
What are Some Trading Strategies?
Trading strategies differ mainly on two fronts: the analysis used and the time frame of market exposure. Traders can go both long and short, depending on their preferences and views of market developments.
Scalping: a trading strategy that’s performed in the shortest amount of time possible. Practically, the aim of this approach is to “scalp” small profits from imminent moves in stocks, currencies, or other assets.
Day trading: this strategy is focused on capturing intraday moves, or those happening in a single day. In other words, your trade should be opened and closed within a single trading day. This is preferred if you don’t want to roll a position into the next day, thus avoiding any unfavorable news.
Position trading: a strategy for the financial markets that allows you to profit from ongoing trends. Spotting a trend is difficult when you trade in a single day. Position trading, on that note, could be stretched to several days in order to find a trend and ride it out.
Swing trading: this strategy aims to take advantage of relatively longer price movements. Typically, swing trading is the trading strategy with the widest time horizon. It could span to several weeks of holding, so that once a trend is identified, it could develop and finish.
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