A trader’s dictionary describes a trading strategy as something that traders use when it comes to buying and selling in the financial market. These trading strategies mostly consist of predefined rules that are used when a trader makes a decision. This strategy is composed of the most precise trading and investing plan which also includes investment objectives, risk tolerance, time zones, or even the implications that could arise because of tax.
The intensity of the planning is based on the financial instrument you will use. The more complex it is, the more research and planning you need. As for the opening and placing of trades, the broker you chose is responsible for this. As for the identifying and managing of trading costs, both the broker and trader need to work together on this especially with the trading fees, commission, and spreads. So, if you are looking for a MT4 trading strategy, you will find the information below quite useful.
Best MetaTrader 4 Trading Strategies
Scalping is a trading method that is mainly based on technical analysis that is real-time. It also refers to creating a huge number of trades with each trade producing small gains. In this method, the trader doesn’t hold the open position for long because the main goal here is to gain a few pips as you make small frequent gains.
High-Frequency Trading (HFT)
Another useful trading strategy, High-Frequency Trading (HFT), uses powerful and complicated computer programs used in transacting a large number of traders in a matter of seconds. It uses complex and specific algorithms that are used to analyze the market simultaneously before executing orders.
The strategy used in swing trading is different from those that are used in day trading and scalping. In swing trading, the open trades can last from days to weeks as they look for multi-day chart patterns. Traders using these chart patterns benefit from large price movements and swings.
This type of strategy involves opening a position that lasts for an extended period of time. Traders using position trading are also considered long-term traders because they expect that the value of their positions will increase over time.
Trading on the News
Another type of trading strategy is trading according to the news related to the financial market. Trading on the news is a very effective strategy because economic data is considered an important catalyst especially when it comes to the Forex market. Traders using this strategy need to conduct strict monitoring of the economic calendar.
Pairs trading is a strategy that allows matching of a long position against a short position which pertains to two stocks having high correlation. The use of this strategy particularly involves technical analysis and its main purpose is to seek out the potential profit of the market.
Another well-known MT4 trading strategy is selling short. But this is particularly favored by experienced traders. Selling short lets the trader speculate whether the stock price will decline against other prices of securities.