Short-term trading strategies with their own nature are required to create worthwhile returns within a succinct investment duration. Here we will look at three shortterm trading strategies and attempt to give some insight to the strengths and weaknesses of each style.
Commodity would be the old standby of olymp trade long-time dealers. This market is and has been well established using deep liquidity for many years and because of this is the hottest vehicle for quick gains in the market. It makes sense exactly what the strengths are of the platform – namely the liquidity, higher name recognition, and broad assortment of resources to purchase and sell.
The principal weakness of the stock option strategy is the high amount of competition on many of the assets (that will be partially offset by the low spreads on those stocks). The other problem it is possible to run into with less-competitive stocks is that spreads widen and finding a profitable exit strategy grows harder. Then there is also the potential issue of automatic implementation of barely in the currency contracts in expiration resulting in account destroying margin calls.
HFT systems are Server based programs which instantly trade securities using computer algorithms to predict market moves and implement commerce orders mechanically. Many apps available operate thus fast in the trades which the purchase rate is measured in orders each microsecond. The advantages of using a system such as this would be the aptitude front-run your trades ahead of other computers and traders in the marketplace. This creates tiny profits for every ranking bought (and presumably instantly marketed). Short term trading strategies such as this would be the gold standard in regards to shortest duration.
The trouble with this type of style is that you’re entering a endless arms race with other traders and investment banks. There will often be a larger bass, with more funds, and better programming. While no machine may acquire all of the action, smaller funding firms will get pushed into the perimeter where ultimately activity is no more justified by the returns.
The last of those short-term trading strategies I talk about here’s using binary options. These types of contracts are now tremendously popular amongst low-income traders due to their high yields and low transaction costs. It’s likely to trade profitably with as little as $100 at a certain brokers. The drawbacks to using shortterm trading strategies involving binary-options consist of small order sizes (typically less than $3000 per trade), limited advantage selection (only the most liquid assets are traded), and limited way of leaving trades once implemented.