What is the directional trading?

Directional trading is an investment strategy based on investor speculation about the way the market is heading. This strategy is based only on the market direction and includes betting on whether the market increases or decreases. Direction trades include production of net long or net short positions on the market. If the market rises, a net long investment strategy pays off, while turning on the market will benefit clean short direction trade. Other sources that the investor can use include currencies, futures and options. In the category of short and long directional trading, the investment can be devoted to a long or short, reserved long or short bias or monitoring long or short strategies.

Reserved long and short strategies include taking up only long or short positions on the market. Long position is most often investors, as the long -term market will increase more likely. DevotedlyShort strategies are less common today, but many unconventional entrepreneurs have used this strategy during the bull market of the twentieth century. The guide business strategy known as specialized long or short distortion maintains either a long or clean short market exposure. The long and short strategy keeps short -term market watches and chooses stocks to be long or short, and at the same time decide when to go for a long time and when to go clean short.

Long and short directional trading is also known as market timing. It is a simple concept that can be applied to any market, and simply involves paying attention to the economy to get or start from the market based on expectations and predictions. Trafficking in the direction is the opposite of market neutral strategies that combine long and short -term markets that result in any net market exposure at all.

directional trading is widely used among the new ones in the stock market and the investment world. At the more advanced ekonOmů was unusual trading options, especially good on the market affected by recessions. This type of trading does not include the attention of the market direction at all. Unarmed merchants are entering the market and ending only after they have made a profit. If the market is constantly decreasing, it will insert a hedge fund, an unregulated investment fund that occupies highly speculative positions.