Short-Term trading of stocks and currency derivatives can be very lucrative, but also risky. It can last for as little as a few minutes to as long as several days. To succeed at this strategy, traders must understand the risks and the rewards of each trade. They must not only know how to spot good short-term opportunities, but also must be able to protect themselves from unforeseen events. Short-term trading can take several forms. For example, buying a share because you read about it in the paper and then selling it a week later for a higher price can be considered a short-term trade. Another increasingly popular tool used by short-term traders is "technical analysis". Technical traders use the historical and current price of a share to make buy and sell decisions.
Technical analysis provides a trader with a number of different ways to choose which share to trade. Most charting software enables the user to filter the entire market to identify particular price characteristics. You might decide to search for shares that are performing strongly, or filter only those shares that are currently reaching new lows for any time period. The trend and volatility of the share can be measured and buy decisions can be made.
An intricate part of a short-term trading plan is "capital management". Short-term traders must always be aware of their current market position, and understand how this relates to their current level of risk. Basic capital management strategies include separating your capital into several portions. This is a valuable addition for any investment plan, but is essential for a trader because successful traders understand that not all trades will be profitable.
You can contact Lehumo Investments team to find out more about short-term trading. Lehumo Investments Clients receives in-depth market research and stock recommendations. This research will enable you to make better trading decisions and get the most out of your chosen trading product.