Advanced stock trading strategies– Since you have been trading stocks for a while, now you want to master in stock trading. There are many strategies for stock trading, but some of them which are used by experts for earning a good amount of profits are margin trading, short selling, considering IPOs, and scalping trading. In this article, we are stating some facts about these advanced strategies.
1.Margin Trading Strategy in Stock Markets:
In the margin trading margin account has to be opened with the broker. Brokers provide you with additional funds for buying the stocks. Traders might get some charges for using that funds. Traders can buy extra quantities of stocks with the help of that fund. Margins allowed to the traders will be different with every broker. ETFinance is the top stock broker that offers high margin trading.
If you want to buy stocks for 3000 $ using margin trading, you will have to pay half the amount that is 1500 the broker will pay $ remaining part. In this case, if your profits will be calculated on the total amount, which is 3000 $ after deducting the broker’s fund, you will get your 1500 $ with your gained profit. So you can double your profit with margin trading.
2.Short Selling Strategy in Stock Markets:
Short selling is a pro-level strategy used by the advanced stock traders. Short traders are always looking for the best stocks to sell. Short sellers do not own the sold stocks because they assume that soon the value of the stock will decline. When the price drops, they purchase the stocks at a shorter price and gain the profits and return the shares to owners.
While using this strategy, traders must have speculation about the stocks whether the value will drop or raise. This strategy will attract loss for the inexperienced traders.
As word IPOs, the letters describe the word-initial public offering. When a privately owned company goes publicly to raise funds without going under debt, against that they offer their shares to investors is known as IPO.
Traders can earn profits in two ways through IPOs. The one way is to wait and watch by checking whether the price of shares is quoted reasonably and if so, then by buying them. And the other way is by buying them at an early stage so that when their value increases quickly, you can sell them.
4.Scalping Strategy in Stock Markets:
In the scalping method, the holding period is the shortest. Traders use the difference between the bidding price and asking price for making the small profits in several small trades. Significant price movement is not involved in the scalping method; instead, that focuses on making profits from the small market movements as the price moves from one to the other. Where there is less market movement and no sudden movement, scalping is the best strategy to make small profits.
In the scalping method, there are multiple trades executed in single days. With the advanced technology, the scalping can be done using machines and robots, with that the holding time can be reduced to a few seconds from a few minutes. This is also known as high-frequency trading.
Traders can earn good profits with all these strategies, but also there are high risks involved in these methods. Traders should be more careful as there might be huge losses too. Traders must have immense knowledge and patience to execute these strategies appropriately. It’s advised that before using all these strategies, traders should consult the brokers. ETFinance is one of the top brokerage platforms for stock trading; traders can open accounts and avail all the benefits from them.