Trading Strategies

When it comes to strategies, s trading is not very different from conventional trade in the financial markets. After all, the profit factors are the same.
There is not one correct strategy to ensure profit, in fact, there never is any guarantee of profit. The strategies a trader should implement depend on a variety of parameters. First off, it depends on the investor himself. What is your level of knowledge and experience, where are you located and how is your financial stability? Secondly, for different assets, different strategies may be better suiting. An approach also depends on the history of the asset, the current situation of the market, popularity and other factors. We’ll introduce you to some of the most commonly used strategies of s trading today. This will give you an overview of some concepts to reach decisions regarding your investment with Jones Mutual.

Momentum Trading

This is essentially the same as day trading. As the term indicates, it refers to trading within the same day or trading at the moment. Trades are opened and closed the same day.
In order to succeed with this type of trading, you want to look for assets that are moving. Because the essence of s trading is to gain on either an upward or a downward movement, you will be able to gain on any asset movement, the more, the better and the faster, the better. In addition, you will use different indicators that show the profit potential. It goes without mention that you want to focus on the assets with the most significant potential.
With this method, you save on layover costs, which are applied when a position is kept open overnight. It is a simple strategy that doesn’t require in-depth knowledge about the market or analysis. In the long run, it’s not sufficient to rely on these simple factors, and you will want to develop more sophisticated strategies that build on it.

Swing Trade

The swing trading strategy is another short-term method of s trading. However, while day trading positions last less than a day, in swing trading positions typically reach into the next day or even a few more days. This strategy involves some technical analysis and is based on the identification of an overall trend as the first step. A trend is a general direction an asset price takes, even though there are corrections and small movements in the opposite direction.
Once a trend is identified the trader can decide on the position, he will open. If the trend is upward he will decide on a ‘long’ position in order to profit from this trend. The entry point here is when the price is moving away from the trend and preferable just before it will reverse its movement back to the general trend. If the price of an asset is trending down, the trader will enter a ‘short’ position that allows him/her to profit from a decrease in price. The entry point is at a moment when the price is moving upward.
The advantage of this strategy is that trends are relatively easy to predict and they usually continue for some time until they reverse. The challenge is to exit before this happens. It may be hard to spot the exact moment this occurs. Take a look at the charts and tables in Jones Mutual section.

Hedging

The goal of this strategy is to lower risk and provide some protection from losing an entire investment. Here’s how it works: You have a large open position, the main position. Additionally, you open an opposing position, which is inversely correlated to the main open position. These trades balance each other out. When one loses the other gains and vice versa.
With this system, you can never suffer a significant loss. However, you will also not be able to gain large profits. The idea here is for the opposing position to be significantly smaller than the main position. This way you can gain on the main position. However, should your prediction be wrong and you lose on the main position, you still have the opposing position, on which you make some profit. Thus you save some of the investment.

Trading Based on News

Some traders prefer to rely on economic indicators and market analysis rather than technical analysis when it comes to financial investment. In this strategy, the trader attempts to predict the price movement according to developments in the market or the publication of specific market information. Data that impacts price development such as interest rates, inflation figures, employment statistics, production figures, import/export percentage and so on is available on the Jones Mutual.
These figures are regularly published at preset times. As a trader, you can schedule entries and exits accordingly, because once the data is published, it will have an impact on specific asset prices. Opening large positions just prior to this is not advisable, because the news may reverse the trend. Only after the story is out can you make speculations on which asset prices are going to be influenced and how. These economic indicators can impact existing open positions as well.
In addition, there are unexpected news events that can also affect the financial market such as political conflicts, natural disasters, announcements of large companies with global influence, etc. While determining your s trading activity only based on the news is exhausting and time-consuming, it is always wise to keep an eye on the news and be aware of outside influences on the financial markets. Keep yourself updated with the Jones Mutual every day.

Breakout Trading

For this trading strategy, you need to understand the basics of technical analysis. Breakout trading is based on identifying ‘support’ and 'resistance’ levels. Finding the ‘support’- line on the graph marks the level which the asset price is not likely to move under, or, in case it does, will most probably bounce back up. The ‘resistance’ is an imaginary line on the graph marking the level at which an upward moving price is likely to stop. The idea is to enter the market once a price moves outside of the defined area between ‘support’ and ‘resistance’.
Another condition is that this move needs to occur with increased volume. Identifying these ideal entry points into the market requires knowledge about financial graphs and experience. Check the Jones Mutual to learn reading and using financial charts.

Range Trading

Similar to the breakthrough strategy, range trading also uses the ‘support’ and ‘resistance.’ However in this type of trading a high range located over the resistance, marking the zone in which an asset was overbought is significant. Likewise, the range in which the asset was oversold, which is located under the support, is relevant. The trader will focus on resistance zone and the support zone. Basically, the trader starts being alert to an asset once it enters either one of the zones. He will open a position sometime into the zone, as it is expected to move back into its regular price zone eventually.
Range trading is suitable for advanced s traders because a good understanding of technical analysis is required to identify the different zones. The Jones Mutual will help you acquire the necessary knowledge and skills to get to an advanced s trading level.

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