Strategies can become remarkably complex and we are well aware that this can be intimidating to new traders. To get you started with online trading strategies, our team has discussed seven strategies which we consider easy to implement into any investment portfolio.
We have also ensured that all the strategies discussed here can be applied within our service. If you are ever in doubt, be sure to discuss the matter with your dedicated relationship manager within our service.
1. Long/short
Perhaps the most common strategy that is applied by traders is the long-short approach. This involves taking a long position with a market that is anticipated to increase in value and the short position if your price prediction anticipates a decline in value. This strategy is counterintuitive for the traditional traders who are looking to make long term investments but it can be profitable if you manage to use it correctly. This strategy is predominantly used with hedge funds but the concept can be applied to a wide variety of markets.
At CAPEX, we provide you with an insight towards hedge funds activity and you can also enjoy an enormous variety of stock options to choose from. There are plenty of markets available with all of our accounts and strategies are welcomed within our service – just ensure that your markets of interest are covered.
2. Day trading
Another common strategy that is employed by traders with a bit more time on their hands is day trading. If you have never come across the term before, we suggest that you browse through the day trading definition that is available within our training academy. The strategy involves opening and closing your trading positions within the same day. This provides you with smaller, short-term gains that stack up to make a larger profit. By using this strategy, you exclude yourself from any overnight changes that might impact the market you are investing in.
As any CAPEX customer will tell you, thanks to our STP system that is used within our online brokerage service, we are able to complete transactions very quickly. This means that day trading is certainly an option once you have opened your CAPEX account, but it will involve a fair amount of time to be devoted towards making your transactions. If you are an active trader with time to spare while the markets are open, then day trading might be the perfect strategy for you to use.
3. Swing trading
Quite similar to day trading, swing trading also makes use of short or medium term price changes to make a profit. This strategy is reliable for traders that have a little less time on their hands to complete their transactions. Market swings usually begin with a high degree of momentum and this generally subsides after some time. With swing trading, you are looking to make the most of this initial swing by investing at the correct times. Once the swing begins to slow in its rise, swing traders will sell the asset and claim the profits.
The major consideration that needs to be made with this strategy is the potential of a swing being short lived. You might find that the rally proved to be momentary and the price has undergone a massive downward shift overnight. Luckily, our online broker service includes a stop loss option which customers can set to avoid this outcome.
4. News trading
The name says it all when it comes to this one. You simply have to follow the relative media outlets to find articles that are relative to the markets you are invested in. While the strategy seems easy enough, you have to ensure that the news you are reading is provided by a reputable source. There is a large amount of fake news on the internet today and don’t let this misinformation be the cause of losses with online trading strategies.
You can apply this strategy within our service here fairly easily at CAPEX. Our entire platform is designed to be easy to use for anyone that is looking to make a transaction. You can also enter and exit trading positions as you please with our low spreads and commission fees. Applying the knowledge you gain from the news has never been easier..
5. Position trading
We come to the first longer term strategy that customers can use with their investments. Position trading is fairly popular amongst online traders and can span the course of decades. The strategy involves entering a trading position of a certain asset at a point in time where you deem the value will increase. This strategy is ideal for a trader that does not intend on devoting much time to their investments and simply hopes to reap the rewards after a certain amount of time.
This might seem too good to be true and it definitely is if you haven’t done the necessary research into your investment. Position trading will be a long-term commitment and one that shouldn’t be taken lightly if you are hoping to make a profit.
6. Social trading
One of the younger online trading strategies that online traders are using is social trading. This strategy will require very little devotion to time as you will mostly be mimicking the trades completed by more successful traders on the scene. The strategy sounds concrete enough but choosing the correct trader to follow is incredibly important if you hope for the strategy to succeed. There are plenty of traders that will claim to guarantee their customers success and you will likely have to pay for the ability to mimic these trades.
This can be done using the CAPEX service, you will have to find your own trader to mimic but our platform makes the option to buy and sell incredibly easy. You will be able to open an account and get to placing your trades within minutes provided that you have the necessary verification documents on hand. Social trading can be a powerful strategy but it will require traders to make the important decision of who they are going to follow, so research is key.
7. Signals
The final strategy that we will be covering is signals trading. This is the most automated of strategies that are available on the market and it simply relies on traders to wait for the correct signals to enter or exit a trade. These indicators are generated through thorough analysis of the relevant market and are calculated mathematically to provide traders with the optimal point. With this strategy, you will mostly be relying on the previous performance of the stock as the calculation will take this into account. Although, as we all know, stocks can behave erratically and a signal may prove to be incorrect.
You can make use of the relevant signals while you are investing with CAPEX. All you need to do this is an active account and the funds necessary to invest in the markets that your signals are provided for. We have access to over 5,000 different options for you to invest in so it is fairly likely we have your interests covered.
