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.
➣Heiken Ashi strategy is another intriguing Japanese phrase related to candlesticks - the most widely used form of displaying price charts in the financial markets.
Williams %R received a more sensitive oscillator than Stochastic with the same mathematical approach. The main difference is that Stochastic takes into account the lowest price to compare the current momentum, while Williams % r measures the highest price in its calculation.
A swing trading is similar to buy-and-hold investment strategy (or sell-and-hold, depending on the trend’s direction). The difference mainly relates to the trading period as equity investors, for instance, develop their strategies for weeks and months.
Inside Bar is a chart pattern consisting of two candlesticks or bars. The first candle or Mother Bar has usually a long body in the same direction as the previous trend.
Scalping strategies are popular in the foreign exchange market due to several advantages they give. The combination of those factors gave birth to 10 pips a day forex strategy.
For example, changes in interest rates by major central banks influence sharp price action by appropriate currency pairs, crude oil inventories have an impact on the price of oil.
Scalping forex well with any asset class including all currency pairs, stock indices, commodities and cryptocurrencies.Some currency pairs, like exotics or cross-rates (USD/ZAR, USD/MXN, GBP/NZD) do not have such a trading volume as majors have.
Trading activity is traditionally divided into several sessions in the foreign exchange market. That’s related to real-money accounts which are intended to exchange currencies from import-export operations.
Forex candlestick pattern are must have for profitable forex traders arsenal of tools to use on a daily basis as they proved their efficiency throughout centuries. This article is aimed to explain the basics, show examples of profitable trading and reveal how can traders benefit from the candlestick strategy.
Reversal strategies are often used in strong trends when the price of an asset is moving one way in general but has particular retracements and corrections. This is why it’s extremely important to find reversal entry points as well as determine the potential depth of a by-trend bounce in order to open new trading positions or add volume. At the same time, trading systems are aimed to avoid false signals with filtering thanks to additional technical tools, which suppose to confirm or deny the signal from primary indicators. The best number of instruments used in a strategy is three as sometimes a pair of them do not give full information about the short-term momentum and direction.
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.