Active Trading Investing: Few who try it have any success at it. Even fewer see stellar returns.
Most active traders use some form of technical analysis.
This research tool focuses on the changes in the price of the stock rather than on the measurements associated with the underlying business.
As such, you can profit from much shorter-term moves. You have the chance to employ leverage with your strategies.
Active Trading Investing
With this trading strategy, you can work on any time frame from months, days, minutes, or even seconds.
You use price data from exchange feeds or from charting platforms to see recent price patterns and market trends. You use these to predict future price movements. To bolster your chances, you must set parameters for levels of risk, reward, and win-loss rates.
Note
Technical analysis
Technical analysis may be the main tool for active traders, while fundamental analysis may be the main tool for growth investors. Both camps can make use of both tools from time to time.
You may also employ a slower-paced version of active trading known as momentum investing. The strategy says that even in random price movement, trends emerge.
You may make longer-term investments meant to last several months, hoping that momentum will build and that the price will continue in the same direction.
The idea is to “buy high and sell higher.” For instance, a mutual fund manager may seek growth stocks that have shown trends for consistent appreciation in price, betting that the rising price trends will continue.
