Modern speculative trading strategies

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Modern speculative trading strategies

Category : Strategy

The success of a trader in the financial market depends on his analysis and the methodology for predicting the future value of the asset. Relying on one or another method of trading operations, a trader takes on his responsibility the management of capital. That is why the choice of the trading strategy plays a key role in shaping the future profitability.

Each fix api trader has his own approach and vision of the market. This, in turn, has generated many different specifications and types of trading strategies, which, according to the retention period, can be divided into:

  1. Long-term;
  2. Intraday;
  3. Scalpping;
  4. Speculative.

It is about the last form I’d like to tell you today. In the conditions of the foreign exchange market fix api forex, I think this kind is the most effective.

The principle of speculative trading strategies is to open deals with a short holding period. As a rule, such operations are performed on the basis of one signal and are fixed with a small income. Thus, the whole result is formed due to a large number of such operations. This allows you to trade with the possibility of a slight deviation from the forecast.

Speaking of speculative trading strategies, I also conditionally divide them into 3 key types:

  1. Fix api arbitrage trading. This type is based on the principles of opening trading positions based on the exchange difference of the same financial asset, but on different stock exchanges. This strategy is carried out by trading robots that constantly compare quotes on different brokerage websites and in case of obvious deviations the robot opens a deal for purchase where the quotes are lower and the sale where the quotes are higher. Thus, after the difference between the value of the asset returns to the normative values, the algorithm fixes several points of profit (exactly that value, which is a deviation from the norm). On this principle, the arbitrage strategy is trading Lock Arbitrage –;
  2. News trading. The essence of this technique is to open trading operations at the time of publication of important statistical indicators that create increased volatility in the market. The algorithm is based on past data and expected (predicted), and if there is a discrepancy between these values, the robot opens the operation in the direction of movement and actual results;
  3. Scalping systems. These speculative strategies can be based on anything. Whether it’s the intersection of two MAs or the Bollinger Bands indicator – main principle is to get a signal to open a position, for the possibility of fixing just a few points of profit. Speculative positions are able to open about 100 trading operations in just one day, thus confirming the fact that all the profitability of such strategies has a positive result due to the number of transactions.

Apparently, for speculative operations one of the mandatory conditions is trading through algorithmic trading strategies. For a day, several dozen or even hundreds of positions can be opened, and with this task the trade robot will do its best. Also note the fact that properly formed algorithms for these strategies can have minimal risks or none at all (fix api arbitrage algorithm). After holding positions is a few seconds and with a small result, which proportionately reduces and possible risks.

To summarize, I want to note the effectiveness of these strategies in the fix api forex market. Since the foreign exchange market has increased liquidity, these strategies show excellent yields. Moreover, speculative strategies, in the form of trading robots, can interact in conjunction with long-term trading strategies. This allows to increase the diversification of trading operations and improve the risk/return parameters for the entire investment capital.

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