Copy trading allows less experienced traders to replicate the trades of professional traders automatically. Key Points: Used in Forex, Crypto, and Stock Markets. Works on platforms like eToro, ZuluTrade, and Tradetron. Example: A trader subscribes to a top-performing Nifty trader…
Arbitrage trading involves exploiting price differences of the same asset in different markets for risk-free profits. Key Points: Common in futures vs. spot market, options pricing, and cross-exchange arbitrage. Requires fast execution and large capital. Example: A trader buys Nifty…
Algo trading uses automated systems to execute trades based on pre-defined conditions, reducing human emotions in decision-making. Key Points: Uses high-speed computing and mathematical models to trade. Includes High-Frequency Trading (HFT), where trades are executed in milliseconds. Common in institutional…
The Bottom-Up Approach focuses on analyzing individual companies first, rather than starting with macroeconomic or industry-wide trends. This method is based on the belief that a well-performing company can outperform its sector or even the broader market, regardless of economic…
The Top-Down Approach begins with a broad analysis of macroeconomic factors before narrowing down to specific sectors and finally selecting individual assets (stocks, commodities, or currencies). It is based on the idea that overall economic conditions significantly impact the performance…
Scalping is an ultra-short-term trading strategy that focuses on capturing small price movements within a very short time frame, often lasting seconds to minutes. Scalpers aim to make dozens or even hundreds of trades per day, accumulating small profits that…
The Exponential Moving Average (EMA) is a variation of the Simple Moving Average (SMA) that gives more weight to recent price data. This makes EMA more responsive to price movements compared to SMA.
The Simple Moving Average (SMA) is a popular technical indicator that helps traders identify price trends. It calculates the average closing price of a stock or asset over a set number of days, smoothing out short-term price movements to make…
A Bear Put Spread involves buying a put option at a higher strike price and selling a put option at a lower strike price. It profits from a moderate price decline and helps reduce the cost of buying a put…