In one of my recent trades, I was watching a stock with high liquidity and sharp price movements. The stock had just experienced a breakout, and I saw an opportunity to jump in. Using my trading tools, I identified a strong support level and entered a position with a small, controlled ...
Leverage allows a trader to control a larger position using less money (margin) and therefore greatly amplifies both profits and losses. Leveraged trading is also called margin trading. Leverage will amplify potential profits and losses. For example, buying the EUR/USD at 1.0000 with no leverage,...
Pairs trading strategy demands good position sizing, market timing, and decision making skill. Although the strategy does not have much downside risk, there is a scarcity of opportunities, and, for profiting, the trader must be one of the first to capitalize on the opportunity. A notable pair...
Forex scalping is a trading approach where quick, small trades can add up. We explore how it works here.
Futures contracts are traded on exchanges, and traders need to put up a margin to open a position. D. Options Trading: Options trading is a margin trading strategy that involves buying or selling options contracts, which give traders the right but not the obligation to buy or sell an asset...
A trading plan is beneficial across all types of financial instruments. Whether you're a forex trader monitoring currency fluctuations, a stock trader analyzing company fundamentals, a crypto trader navigating volatile markets, or a CFD trader looking to capitalize on price movements, a trading plan...
orders (instructions that a stock be bought or sold when it reaches a specific price known as the stop price), diversification, and position sizing (the size of a position within a particular portfolio, or the dollar amount that an investor is going to trade) to protect against significant ...
Market congestion is a supply and demand trading factor that influences the liquidity and trading price of a security or trading instrument. It is a concept used bytechnical analystsand traders. Once buyers gain the upper hand in trading, the stock price goes up as the buyers are willing to ...
For purely passive vehicles likeindex fundsorexchange-traded funds(ETFs), you’re likely to pay one to 10basis points(bps) in annual management fees. Investors may pay 200 bps in annual fees for a high-octane hedge fund with complex trading strategies, high capital commitments, and transaction...
Tesla's stock was trading at about $200 per share. Several investors pool their money and believe that Tesla's stock price will fall or remain at about that price in the short term. They write a naked call option with a strike price of $300, expiring in January 2025. The investors get...