Many people decide to invest their capital in a solid opportunity that will yield a significant profit and thus a considerable ROI (Return on Investment). In addition, many investment opportunities can be researched and taken advantage of online, due to the advances provided by the improved computing power and fast Internet speed.
Whether you’re a business owner or not, you must be wondering which is the best trading strategy for your investment type. The answer to that question, however, depends on your personal style, goals and the circumstances you’re in. One thing that every trading strategy has in common is that they cannot guarantee success 100%.
Oftentimes it comes down to changing strategies in order to minimize, as well as mitigate, the risks. Still, that doesn’t mean that some strategies don’t perform better than the others. After all, you have to start somewhere, and you might as well take your chances with a trading strategy that’s been proven to work in different circumstances. With that in mind, here are a few online trading strategies for 2020.
The most popular investment opportunity is investing in stocks. Companies have their shares on the stock market which investors can explore and invest in. The value of stocks on the market depends on the company’s performance and profitability. For investors, stocks investments are ideally suited for short, mid and long-term investments.
You can trade stocks by buying and selling them when the price is right, or you can generate dividend income by holding on to them. When it comes to trading, market volatility can have a significant impact on the prices.
To put it simply, trading stocks can be quite risky. Therefore, one of the increasingly popular trading strategies for stocks in 2020 is option strategies. Options, such as call or put, allow investors to reduce the risks involved in trading stocks. A call option allows you to buy stocks, whereas a put option allows you to sell them at a certain predetermined price, regardless of the current market price.
The Foreign Exchange market, or simply Forex, is the largest open market for trading foreign currencies. This investment type is more suited for short-term investments as the nature of the market is very dynamic and volatile.
Simply put, the Forex trade involves a lot more risks than other investment opportunities due to its very high pace. However, one can make a significant profit in a very short time with the right strategy in place and a lot of careful planning.
Since the currency exchange success depends on inside info, the best approach to trading on the Forex market would be to practice a lot. The fact of the matter is that 95% of new traders will ultimately fail at first. Therefore it’s highly recommended to practice on a demo account until you can create your own trade plan. After that, the approach you’ll take is entirely up to you and the goals you have in mind.
Exchange-Traded Fund Investments
Investors prefer to diversify their investment portfolio in order to reduce the risks involved as much as possible. One of the ways to invest while focusing on diversification is to opt for Exchange-Traded Fund Securities or simply ETFs. An ETF is a collection of securities, such as stocks, for example, and they track an underlying market index.
This investment opportunity is ideally suited for beginner investors. The main reason is that investing in ETFs includes low expense ratios, high liquidity, a wide variety of investment choices, low investment threshold and of course, diversification. That said, one of the popular online trading strategies for ETFs is Asset Allocation.
Again, this is ideally suited for beginners, especially since this strategy allows allocating a portion of your portfolio to different categories of assets, such as stocks, bonds, cash and commodities like gold or silver. Low investment threshold for ETFs is around $50,which is ideal for basic asset allocation strategy and a high risk tolerance diversification.
The digital money or cryptocurrencies have only been around for a decade, and they’ve risen in both popularity and investor interest tenfold during that time. Digital assets that are completely decentralized and independent of any bank or government regulation are surely an interesting opportunity for investors, to say the least.
However, due to the fact that there’s no regulation, the cryptocurrency trade is very risky and volatile. With the Bitcoin leading the market, as well as being the most valuable currency on the market, an obvious choice would be to start there.
You can start by engaging in Bitcoin day trading, or you can consider the same strategy for alternative cryptos as well. In any event, cryptocurrency trade can be an excellent opportunity to amass huge profits. Still, it can also be a fast way to lose everything you have. That’s why you should take heed when trading in crypto, at least until the market stabilizes in the future. Online trading has become a popular approach for investors. After all, it’s a more comfortable and convenient method. However, just because the approach is digital, it doesn’t mean you can relax. Any investment opportunity holds a risk, which is why you must pick the strategies that will not only suit your needs best, but also help you minimize those risks.