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 identi
Financial trading is, at its core, the act of buying and selling financial assets like stocks, currencies, or commodities—with the goal of making a profit. Today, a lot of trading is speculation, and the traders involved are not really interested in becoming part-owners in a company, recei...
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,...
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 ...
(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 losses....
Volume:Ifvolumedata is available, the trader should look for increased trading volume during thebreakoutabove the neckline as a confirmation signal. Entry: Buy Signal: The trader could enter a long position when the price breaks above the neckline, preferably on high volume, or when price returns...
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...
Before you begin trading, you must face the fact that it can be a risky endeavor. Here are some ways you can reduce your exposure. Position Sizing Traders should research historical price ranges of commodities as a guide to calculate worst-case scenarios. Entering positions in small sizes can...
Tactics thatleveragestock Sector or country selection Fundamental analysis Position sizing Technical analysis Active managers hunt for analpha, the measure of excess return. Alpha is the amount of portfolio return not explained by beta in our diagram example. It's represented as the distance between ...