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Short Term Trading Strategies

Shortterm trading strategies from their very nature are expected to create rewarding returns over a brief investment duration. Here we will look in the three short-term trading strategies and make an effort to provide some insight into the advantages and weaknesses of each style.

Commodity

Stock options are the old standby of long-time olymptrade traders. This sector is and it has been well established with profound liquidity for many years and consequently has become the most popular vehicle for quick profits on the market. It makes perfect sense what the strengths are with the platform – namely the liquidity, high name recognition, and also broad range of resources to purchase and sell.

The primary weakness of this stock option strategy is that the high degree of competition on a number of the assets (that will be partially offset by the reduced spreads on those stocks). The other problem you can run into with less-competitive securities is the fact that spreads and finding a profitable exit strategy grows more difficult. Then there is also the possible issue of automatic implementation of barely in the currency contracts at expiration leading to account destroying margin calls.

High Frequency Trading Systems

HFT systems are Server based programs which immediately buy and sell securities using computer calculations to forecast market movements and implement commerce orders automatically. Many apps on the market operate so fast in the trades that the order speed is measured in orders each microsecond. The advantages of using a platform similar to this would be the ability to front-run your transactions ahead of different computers and traders on the marketplace. This creates tiny profits for every single ranking bought (and presumably immediately sold). Shortterm trading strategies similar to this will be the gold standard when it comes in shortest duration.

The issue with this kind of style is which you’re entering a never-ending arms-race along with different dealers and investment banks. There will be a bigger fish, using more funds, and much better programming. While no machine can acquire all the actions, smaller funding firms will increasingly get pushed into the perimeter where ultimately activity is no more justified by the returns.

Binary-options

The final of these short-term trading strategies that I mention here’s using binary choices. These types of contracts have become tremendously popular amongst low capital traders given that their high returns and low trade costs. It is possible to trade profitably using as low as $100 at a certain agents. The drawbacks to using short-term trading strategies involving binary-options include small order sizes (an average of less than $3000 per trade), limited asset selection (only the most liquid assets have been traded), and also limited means of leaving trades once implemented.