Although some early day trading systems have lost their sheen since the beginning of the millenium other platforms and methods have sprung up in their place. New platforms designed with the ultimate short term trader in mind exist today based on the industry desire to satisfy clients with a desire for high liquidity and volume. Here we look at how three day trading systems work for today’s high turnover investors.
Forex Trading Systems
Among the biggest movers in the financial industry after the first explosion of day trading systems, forex trading continues to be popular. The expansion of retail trading platforms has made currency trading available to effectively anyone who wishes to give it a try, and many people have. The strengths of working the forex market include the high leverage available and wide variety of automated trading programs to use – including self designed expert advisor / automated trading systems. The downside is the high volatility and danger of margin calls made against highly leveraged positions. Further – leaders in “high interest rate income” currencies such Brazil’s real (amongst others) have grown wise to the impact of international forex investment in their currencies and the damage it can do to their economies. As a result many of thes countries are taking steps to curb interest rate arbitrage by limiting re-patriation of foreign funds invested in their country.
More on Forex Trading Systems
Options Trading Systems
While many traders opted to give forex markets a try, those who didn’t tended to use options trading systems and strategies instead. Although far fewer automated systems exist for options traders – the smaller reliance on margin and lower volatility generally make the need for automated systems a little less necessary for retail traders to compete. That and the development of robust trading platforms at major online option broker platforms make it fairly straight-forward for individuals to setup entry and exit trades long in advance. A slightly more risky method of day trading options involves selling (writing) options (and collecting the premiums) and holding the cash rather than going long the options and holding the right to buy or sell. There are multiple reasons one might use this call or put writing strategy but that is covered elsewhere. Suffice to know that such strategies exist and do work for some traders.
More on Options Trading Systems
Binary Options Trading Systems
A last, and far and away the most simplified form of day trading systems involves binary options trading. Developed late in the decade and rapidly growing in popularity ever since, binary options trading involves the day long or hour long purchase of a fixed dollar, fixed yield contract which pays out quickly depending on whether the asset price ends in the money or out of the money relative to the contract strike price. As time has gone on, a variety of these trades have become popular, most notably the binary options hedge, the barrier option, and the touch / no-touch option. The near universal popularity of these short term high yield investments may have something to do with the suddenly high correlation between what used to be essentially unrelated assets. The world of day trading has become to great extent a world of “risk on / risk off” investing where capital flows move in and out of assets together like turning a switch on and off.
More on Binary Options Trading
Twitter
Facebook
Myspace
Youtube
Identica