Trading Strategy

“A trading strategy is a well-organized methodology that traders use for buying and selling in the financial markets. When developing a trading strategy, traders consider many factors like technical and fundamental analysis, investment style, market capitalization, portfolio diversification, time frame, risk tolerance, leverage, tax considerations, and more.

Traders design a trading strategy by using accurate data and market analysis, and once set, they follow it rigorously. However, it should also be regularly re-assessed and improved as the financial market or traders’ goals might change.

ICCampaign advises using the following trading strategies for each market. Although, we are not saying you have to use them and only them.

Trading strategies for each market

The best digital currency trading strategy

“Day trading digital currencies is easy as both beginner and professional traders can successfully apply this strategy. You open and close positions within a day to benefit from intraday price changes of digital currencies.

This strategy is best for digital currency trading because traders can manage the risks of keeping positions open overnight. So, if you cannot stay calm while watching digital currencies’ price fluctuations over a long period, you should add this strategy to your trading plan.  

The best forex trading strategy

“Position trading is a long-term strategy focused on fundamental factors. That means that small changes in the market are not taken into account in this strategy, as they do not affect the market situation as a whole.

Position traders follow central bank monetary policies, political developments, and other fundamental factors to identify cyclical patterns. Successful position traders can open just a few trades all year round. However, earnings targets in these trades are likely to be at least a few hundred pips per trade.

This trading strategy is best suitable for patient traders as their position may take weeks or months to close successfully. If you think this strategy doesn’t fit you, then you can also use day trading.  

The best shares trading strategy

A buy and hold strategy is a long-term, less active trading strategy that promises longer-term earnings. Contrary to daily traders, buy-and-hold investors ignore the daily changes in the share price in favor of long-term trends. They are consistent in their research and analysis, ignore short-term trends, and identify companies with solid fundamental metrics. They look for businesses with the long-term potential to grow and provide high dividends or profit from shares’ sales.  

The best indices trading strategy

A breakout trading means opening a position since the onset of a trend. A break-out is a price moving outside defined price levels called support or resistance. A support price level is at the point where an index price shows a predisposition to increase after falling, and a resistance level is where the index price shows a likelihood to decrease after the price has risen. A trader who uses this strategy buys an index after the price goes over resistance (because the price will probably decrease) or sells after the price goes under the support level (because the price will likely increase). Once the price moves beyond one of these levels, the index will probably be more volatile, and the price usually goes in the breakout’s point direction (which means the trader will profit from the position). 

The best indices trading strategy

Trend-following strategies work unusually well in the commodity market. Commodities are usually used as production materials. That’s why many indicators such as inflation and geopolitical events impact them differently from other securities. Their price is also stable and creates a long-lasting trend. Trend strategy is suitable for other financial markets as well. However, since the commodities market is more solid than others, the risk is lower.