Those who want to start investing will not have to reinvent the wheel. After all, it is an activity that has been taking place for many centuries and has also become increasingly popular among private individuals, of course partly due to the rise of modern online brokers.
And even though the products available to novice investors have become more and more extensive, popular older finance and trading strategies also make use of modern investment tools such as leveraged products and binary options.
Trading strategies that have become popular usually have in common that they are also easy to implement. Read and judge for yourself about the first option.
Buy the winners
This strategy can be applied to almost all investment categories such as equities, commodities, and currencies. This method is also applicable to leverage and binary options. The background to the story is the ancient wisdom that the market is always right.
The (novice) investor selects those products that have risen the most in a period (say: week, month, quarter, or year) and buys them. After all, if the market has decided that this increase was justified, it can be assumed that this is about quality and that the increase will continue for a while. The investor who follows this strategy will also have to make clear choices.
If one chooses ‘buy the winners’ one cannot sit back, but one must remain active. After purchasing the winners, there must be a clear follow-up strategy that indicates both at what price profit an investment will be sold again and the maximum period for which an investment will be held, even if the target price would not be reached.
The investor starts each new period of his choice with a new portfolio of winners and therefore a reasonable amount of time should be spent keeping up with this strategy. Furthermore, the transaction costs are of course higher than with a simple ‘buy and hold’ portfolio for the long term. But the latter method has fallen out of use for some time due to the newer investment products.
The investor starts each new period of his choice with a new portfolio of winners and therefore a reasonable amount of time should be spent keeping up with this strategy. Furthermore, the transaction costs are of course higher than with a simple ‘buy and hold’ portfolio for the long term.
But the latter method has fallen out of use for some time due to the newer investment products. The investor starts each new period of his choice with a new portfolio of winners and therefore a reasonable amount of time should be spent keeping up with this strategy.
Furthermore, the transaction costs are of course higher than with a simple ‘buy and hold’ portfolio for the long term. But the latter method has fallen out of use for some time now due to newer investment products.
Success guaranteed?
No strategy offers guaranteed success, not even ‘buy the winners’. But it is a strategy that certainly has value and is reasonably easy to apply with, for example, leveraged products.
There is also a great deal of freedom for the investor, as he can choose the period over which he applies the system and the number of products he selects as winners. Of course, it is of the utmost importance to apply the strategy consistently and of course with a reliable online broker.