Scale trading has been a strategy highly used by experienced traders, as people who use this claim that they “can’t lose”. It employs the often heard principle of buying low and selling high. Scale trading involves setting a limit of how low the price of a commodity being traded can go. As there is, and will always have a demand for commodities (for example, gold), they are not subject to devaluation, thus scale trading is very effective to commodities.
In scale trading, you first examine the trading history of commodities. Then, look for a commodity that is trading at the low price level, around the lower 25%, of its historical range. After that, you may start setting up a scale trading plan on your stock charting software and put it in motion wherein you start buying a commodity at low prices, buy more contracts every time the commodity’s price lower at the scale you have pre-determined (for example, every time the price goes $2 down), and sell the contracts once the market rallies. Scale trading becomes very profitable when a trader invests a large amount of capital and patience, as timing is the main factor in determining when to sell at a profit.
Popularity: 1% [?]
Hi, I'm Monica P. Thanks for stopping by my free articles website. I hope you enjoy all the interesting articles that are available here for you. Feel free to leave any comments for me! 