Investment strategies are approaches to invest money. Each investor has to develop own plan to make use of financial instruments in order to eventually receive a decent profit. Having a strategy allows you to make more informed and balanced trading decisions. This helps to properly build a financial portfolio, which may include cash, stocks, bonds and other securities. This section offers several choices for strategies, and each potential investor can pick the most suitable kind of strategy.
Types of investment strategies
Several behaviour lines are considered the most popular among people committed in investments.
These include the following:
- Conservative investment strategy
- It is suitable for investors who do not want to take lots of risks, want to preserve the initial investment amount and get an attractive income.
- Moderate investment strategy
- In this case, we are talking about greater risk compared to the previous option, but incomes are growing accordingly.
- Aggressive investment strategy
- The investor takes the maximum risk in the hope that he will get an exceptionally great profit.
Those approaches above describe only the general features of the lines of investment method or risk appetite. Short-term and long-term investment strategies are also related to this section. Descriptions of alternative strategies can be also found on the website.
The main idea of the pattern is that asset prices form trends with a certain tendency in terms of relations between corrections and new waves in the previous direction.
A trading strategy based on Shark pattern is a set of conditions and rules to develop an algorithm of actions with the help of graphical analysis.
This feature helps harmonic patterns to get an essential distinction from reversal patterns such as head-and-shoulders, double- and triple-tops and bottoms.
Five touch points form a graphical analysis formation to determine a possible depth of counter-trend price action and signal the end of the retracement.
Donchian Channel is a follow trend technical, similar to the Bollinger Bands approach, measuring trend’s momentum for a given period of time. The key mathematical idea is to calculate the highest and lowest prices for n period.
Using Ichimoku Cloud trader should remember that the nature of it is the trend indicator, so it does not show trading signals for reversal cases. The best efficiency of the strategy is seen in strong and sustainable trend period.
The Aroon indicator is a technical instrument used to measure the trend’s strength and identify the direction of the price change. The indicator consists of two lines ranging from 0 to 100.
Bat patterns is a type of harmonic pattern used in the graphical analysis. The formation helps forex Traders to identify the end of a counter-trend retracement, measuring its possible depth.
Cypher pattern is a XABCD formation with five touchpoints and four legs or waves between them. Each leg represents a price action, while every touchpoint highlights reversal levels.
➣Heiken Ashi strategy is another intriguing Japanese phrase related to candlesticks - the most widely used form of displaying price charts in the financial markets.
How to choose an investment strategy?
The selection of a suitable strategy has to be carried out based on pre-set goals and targets. The wide variety of opportunities and offers in the market might scare a beginner trader. In this section, you can easily choose the tactics that will help you make sufficient profits. All aspects are accompanied by detailed descriptions, the investor can easily find out what is investing in stocks and which types of investment strategies are better to implement.