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The 3 Most Popular Trading Strategies

Trading is often associated with the idea of “easy money,” as all you need is a device (desktop, tablet, or mobile) and a reliable internet connection. But before you start trading through an online broker, such as UFX, you need to decide which trading strategy suits you best.

1# Scalping

Scalping is one of the most popular trading strategies employed by very active traders. The idea is to remain in front of your screen for long periods in order to spot and exploit small price changes within a few seconds or minutes of spotting them. Holding these positions for very short times reduces the risk you are exposed to and enables you to repeat the process many times over the course of a day. This is a fast-moving, high-stress strategy which is by no means for everybody, but it can be a very profitable approach for those who thrive on rapid-fire decision-making.The 3 Most Popular Trading Strategies

2# Day Trading

Day Trading is probably the most well-known system for active traders. As its name implies, Day Trading involves buying and selling several financial assets within the same trading day, with no positions held overnight. Major price swings often settle down, correcting themselves within the space of a few hours, so most of the profits from a good trading call can be realised before market close.

3# Swing Trading

Swing Trading is often associated with the fundamental technique of trading, which applies expert economic, financial, industrial and/or political knowledge to investing. Positions are held for anywhere from a couple of days to several weeks, as traders attempt to take advantage of general upwards or downward trends in the value of an asset.

At the core of successful online trading is choosing a technique that suits your decision-making style, your tolerance for or aversion to risk, your level of knowledge and how much time you can devote to trading. If you can’t spend much time in front of the screen during the trading day, scalping is not for you. Swing trading might best suit people who have full time jobs, as they can analyse companies’ news releases and charts over the weekend.

Whichever strategy you choose, remember to stick to your trading plan and to apply strict money management rules, to learn from your mistakes and to constantly expand both your technical and fundamental knowledge.

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Fully explaination on how to trade