Investment strategies are not reserved exclusively for advanced level traders. There are actually strategies for all skill levels, including some very basic strategy options for novice traders. The following four are easy to use and can be utilized with more than one form of trading. Although simple, they can each be used to increase your profits when applied correctly under the appropriate market conditions.
Double Up Strategy
At a base level, this strategy calls for a doubling of your investment amount. Of course there needs to be some consideration given to the current market conditions prior to making such a decision. You must make sure that the market is indeed moving in your favor. With traditional trading, you must be prepared to exit the market should the asset value reverse. With forms of trading such as binary options, trades are timed and as such doubling up typically involves creating a trade that is identical to the one that seems headed towards profit.
Market Pull Strategy
This strategy is founded on the fact that some assets are connected to each other. The goal is to located direct pairings that impact one another. For example, if Apple unveils a new phone that is a major hit with consumers, Blackberry could take a hit. Connections such as these can provide you with valuable information as well as investment guidance – all without having to delve into complicated analysis. Note that paired assets need not come from the same category. Various stocks, commodities, currencies, and indices may all be connected. A quick look at any asset listing will show you the potential of this investment strategy.
This is probably not a strategy that you’d want to use when purchasing stocks, although it could apply if you feel that the stock will soon trend upward. This strategy works best with investment tools such as binary options, which can allow you to profit from flat price movement. In these types of trades there will be price targets that the asset price needs to remain between while the trade is open. If this happens, profit is earned. This simple strategy can allow for profits to be generated from asset prices that are stable, with no need for significant price movement.
Long Shot Strategy
This one is equally as simple as the others, but carries the most risk. As the name implies, this strategy is all about taking changes. In the traditional marketplace, this strategy would require purchasing a little known asset, or even one that is not expected to do well and then hoping for the best. Obviously, you’d want to do some research to ensure that your purchase does have some potential to do well.
When trading binary options, the long shot strategy is more of a numbers game where you’d select high-yield trades, knowing that at some point one will pay off. The goal is for the winning trade amounts to eclipse that of the losing trades, leaving some profit behind. This strategy should be paper-tested several times over before being used in an actual investment situation.
These four basic strategies are simple to put to use, but may not be appropriate for everyone. The fact is that some investment strategies are riskier than others and all need to be tested. Keep in mind that small, frequent profits can be just as good as large, single profits. A larger trade volume may be needed in order to reach your goals, but smaller investment sums immediately cut the risk level of each investment and should therefore be taken into consideration.