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A look at three commonly-used online trading strategies
Forming a trading strategy is definitely unique to each trader, however there are a few tried-and-tested options out there that many investors look to when trading on the forex market. Here are three we feel are used most frequently and if executed correctly, can generate consistent and reliable profits.
Frequently, traders using this method will look to open a large number of trades that attempt to earn small, quick profits; ultimately accumulating into a larger pot of profit by end of day.
With the Forex market being one of the most volatile and liquid markets around the globe, it's no wonder traders look to it to try profit off the ample opportunity. Most traders will only make 7-10 pips on each trade including spread and therefore often trade high volumes.
If you are looking for a CFD (Contract-for-Difference) Broker that allows scalping and offers some of the lowest spreads we have seen before, then CedarFX is exactly what you need.
To put it very simply, an investor may open a long trade on USDGBP and a short trade on USDGBP, thus, no matter the direction the price moves at least one of the open trades should profit and thus, mitigate the associated risk and increase probability of profiting.
Hedging is a particular favorite with traders using online CFD brokers like CedarFX. CFDs become specifically useful as a hedging tool because a short position can be replicated to hedge the exact position size required. A short hedge using a CFD is one of the easiest ways to lock in a price, by short selling to offset the risk of any inauspicious price movements.
Copy Trading entails using software known as electronic assistants or ‘Bots’ to automatically copy the trades of another investor. People who watch and admire certain traders and their strategies, may use this method in an attempt to profit. It is also a choice strategy for traders who do not have a lot of time to watch the markets constantly, as the software does all the watching and trade execution on your behalf.
Additionally, this strategy is particularly popular with beginner traders as it can afford them the opportunity to learn consistently-profitable trading techniques and practices.
It is important to note many brokers that allow copy trading do not provide technical support for the software needed. This will be up to you to install and manage.
Sign up to start trading on 180+ assets, with up to 1:500 leverage and lightning-fast withdrawals.
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A look at three commonly-used online trading strategies
Scalping:
Scalping is considered a short-term forex market strategy that utilizes technical analysis in order to determine trade execution points. It aims to profit off small and rapid market movements. These rapid movements are usually over seconds or minutes but often do not extend past these time frames.Frequently, traders using this method will look to open a large number of trades that attempt to earn small, quick profits; ultimately accumulating into a larger pot of profit by end of day.
With the Forex market being one of the most volatile and liquid markets around the globe, it's no wonder traders look to it to try profit off the ample opportunity. Most traders will only make 7-10 pips on each trade including spread and therefore often trade high volumes.
If you are looking for a CFD (Contract-for-Difference) Broker that allows scalping and offers some of the lowest spreads we have seen before, then CedarFX is exactly what you need.
Hedging:
This strategy is also sometimes referred to as a risk management strategy. This is because the fundamental principle of this method is to create a ‘safety net’ by trading correlating assets that commonly have opposite reactions.To put it very simply, an investor may open a long trade on USDGBP and a short trade on USDGBP, thus, no matter the direction the price moves at least one of the open trades should profit and thus, mitigate the associated risk and increase probability of profiting.
Hedging is a particular favorite with traders using online CFD brokers like CedarFX. CFDs become specifically useful as a hedging tool because a short position can be replicated to hedge the exact position size required. A short hedge using a CFD is one of the easiest ways to lock in a price, by short selling to offset the risk of any inauspicious price movements.
Copy Trading:
Copy Trading can also sometimes be referred to differently, such as portfolio management or investment management, depending on the market or jurisdiction you are in.Copy Trading entails using software known as electronic assistants or ‘Bots’ to automatically copy the trades of another investor. People who watch and admire certain traders and their strategies, may use this method in an attempt to profit. It is also a choice strategy for traders who do not have a lot of time to watch the markets constantly, as the software does all the watching and trade execution on your behalf.
Additionally, this strategy is particularly popular with beginner traders as it can afford them the opportunity to learn consistently-profitable trading techniques and practices.
It is important to note many brokers that allow copy trading do not provide technical support for the software needed. This will be up to you to install and manage.
Conclusion:
There are great benefits to utilizing these three popular trading strategies. Should you wish to practice these techniques, you could always open a Demo account with the world’s first green broker – CedarFX. This affords traders the ability to practice their strategies with real market conditions but without risking their capital investment, as the funds used on a demo account are only dummy funds.Why Choose CedarFX?
CedarFX offers an impressive 0% commission account, as well as Eco Accounts, whereby the $1 commission is matched by the broker and sent to the Eden Reforestation Project. To date, 125 844 trees and 122.36T of carbon reduction have been contributed to by CedarFX and their clients.Sign up to start trading on 180+ assets, with up to 1:500 leverage and lightning-fast withdrawals.
Sign up with the leading eco broker; sign up with CedarFX.
