There are many strategies that a
trader may employ while in the middle of trading. One of the most popular is
using the market trends strategy. This is being done in order to effective ride
in the movements of price in the market that may be triggered by various
pre-determined and historically considered factors.
The
said strategy actually happens in the course of a trading day. However, trading
market trends is different from scalping because it does not take place in just
few minutes. Further, among the most important aspect about this is that it
only renders a minimal amount for the transaction costs while there is a very
wide range of potential gains from it.
In
this regard, the perfect timing that many investors grab and launch this
strategy in financial spread betting is when something came out either through
an announcement or from various news stories and then the market is just
beginning to react to that kind of announcement. For example, one of best time
to do this is after elections when the votes had been casted already or when
the winner is about to be announced. Of course, the market cannot instantly
react to the announcement for the very second or minute. Hence, there will be
an adjustment period. During that time, traders will predict or guess on the
possible movement of the market, whether it is up or down.
With
this kind of transaction, it is therefore very vital for a trader to know the
most probably trend of the prices of the instruments, markets and indices
during the period of volatility. This is because it will provide the trader
clear indicators on what is the wise position that he or she shall adopt in
order to gain positive earnings.
There
are many people who think that it is just like scalping. However, aside from
the aspect of different stated above, trading market trends is not similar to
scalping because the former allows the trader to enter a position ahead of the
market. This is in order for the trader to capitalize on the major reactions of
the price of the index when the market is already moving on the trend.
Aside
from trading market trends, there are also other strategies that an investor
may explore. Their appropriateness depends on the specific situation and to the
preference of the trader who will execute the same. Among the other types of
strategies include scalping, which was already stated above, reversals
strategy, break-outs, pyramiding as well as tramline trading and the other
ForEx financial spread betting strategies. The most common strategy that is
being implemented by most investors or traders is the scalping followed only by
trading market trends.
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