Quick profits, fast moving markets and riding the momentum are three key reasons why traders gravitate towards short-term trading like a moth to the light.
Short-term trading continues to rise in popularity due to the ability to make quick gains in any market type. Every day there are stocks, indices, FX and commodities which are breaking out or catching a fast move.
Today we’ll look at three of the most popular short-term trading strategies you can use for quick gains. In respect to the timeframe used, we’ll be classifying short-term trading as not only positions held during the day, but also up to several days at a time.
We are not focussing on pure intraday here. Instead, we are looking for opportunities to ride the momentum for 1-5 days.
What are the advantages of short term trading?
- There are a lot of opportunities for short-term breakouts, so hundreds of stocks to chase every day.
- The news is always happening, so there are lots of opportunities there too.
- You set clear exit points, so you know your risk and potential reward before executing any trades.
Let’s get into the first strategy.