Performing transactions with securities, market participants can conduct real, speculative or arbitrage transactions.
Speculation on the stock exchange is a phenomenon as old as the stock exchange itself.
Before explaining why speculators are attracted to the stock market, we should briefly look at why people speculate. There are two main motives in speculation: the possibility of profit and pleasure. Every speculator will agree with the first motive, but the second is often more important. Some people love risk, and speculation is inherently risky.
As a result, the question arises: is speculation different from gambling? Those who love speculative trading usually point out that in the game risk is created for the sake of risk, while speculation is a risk-taking mechanism that already exists. For example, no one needs to lose money or gain money depending on which card is drawn. Everyone can just refuse to play. However, someone has to lose or gain money, depending on whether the prices of stocks or bonds rise or fall, that is, whether the issuer of these securities or one of the speculators bears the risk.
The psychological motives of speculators do not differ significantly from the motives of gamblers. However, this speculation does shift risk from those who don't want it to those who do. In other words, speculation in financial assets directs the desire for risk taking in an economically productive direction.
Stock trading has great appeal for those who are interested in the combination of excitement and the possibility of big quick profits. First, it presents extraordinary profit opportunities. Secondly, exchange trading is technically easy. You only need to call your account executor and within a few minutes your order will be executed. There are thousands of brokerage houses and many brokers ready to assist clients in their trading. Thirdly, stock transactions stimulate intellectual activity, they make it possible to analyze the market and anticipate its changes.
Exchange markets in themselves are interesting and informative. One of the first features that speculators discover is that very few events in the world do not affect stocks or currencies. Speculation makes those who just want to make a profit more aware of the world they live in.
Most speculators are attracted by the hope of quick profits, and not concern for the welfare of the economy, nevertheless, they perform several vital functions in the exchange markets that facilitate trading in stock values and financial instruments.
The presence of a large group of speculators on the exchange markets benefits both the exchange and the economy as a whole. The main functions that speculators have assumed:
Increasing market liquidity,
Relative smoothing of price fluctuations.
Increasing market liquidity. Speculators are an important source of market liquidity. The constant flow of orders from speculators to the trading floor can significantly reduce the time for the appearance of counter orders to buy and sell. In a liquid market with a large number of sellers and buyers, it is possible to carry out transactions of any scale with a slight change in prices.
At the same time, the arrival of speculators, by increasing the number of participants in transactions, promotes competition, and, as a result, more effective identification of an objective course.
Relative smoothing of price fluctuations. The activity of speculators contributes to the relative stability of the market and generally eliminates price fluctuations, since the operations of speculators are often directed "against the market", that is, against the main price trend at the moment. By buying assets at low prices, speculators help increase demand, which leads to an increase in price. The sale of assets by speculators at high prices reduces demand and hence prices. Therefore, sharp fluctuations in prices, which are possible in other conditions, are mitigated by speculative activity.
Source: Ed. prof. O.I. Degtyareva, prof. N.M. Korshunova, prof. E.F. Zhukov. Securities Market and Exchange Business: Textbook for High Schools - M.: UNITI-DANA, - 501 p. 2004(original)
stock market speculation.
stock speculation- this is a profit as a result of speculative transactions with securities or goods on the exchange markets.
For a long time, stock speculation was considered exclusively a means of profit and was not perceived by state institutions and society as something important that would benefit the economy.
“The soul of the stock exchange is speculation, without speculation the stock exchange cannot fulfill its true national economic purpose, and as a result of this, government and any other policy aimed at eradicating speculation on the stock exchange is the fruit of a sad misunderstanding, to say the least,” wrote about stock exchange at the beginning of the twentieth century, a talented Russian economist, professor at Dorpat University Yuri Dmitrievich Filippov.
The modern attitude to stock exchanges, as well as to speculator traders, is based on a deep economic analysis and fundamentally different from previous worldviews. And here's the thing. Indeed, the actions of stock speculators are driven not by concern for the welfare of the economy, but by quick profits. However, unwittingly, they perform several vital financial functions in the exchange markets. Their actions, like a current of fresh blood, constantly heal the stock body, bringing invaluable benefits to the exchange markets and the economy as a whole. We list the main functions that stock speculators perform daily:
Increasing market liquidity: Conducting hundreds of trading operations per day, speculators contribute to increasing the liquidity of the market. That is, they create a market that allows you to quickly buy and sell. It is due to this circumstance that the number of sellers and buyers is constantly increasing in the market, between which it is possible to carry out transactions of any scale with a slight change in price. Which, in turn, promotes healthy competition, leading to the identification of an objective price.
Smoothing price fluctuations: The activity of stock speculators has a direct impact on the stability of the stock market, smoothing out price fluctuations. Often the operations of speculators are directed against the movement of the market, that is, against the direction of price movement, which eliminates large price drops. Regulation of the supply/demand balance is one of the important results of speculative activity.
Exchange trading.
When conducting exchange operations, a trader must not only choose the right product, but also choose the type of transaction that will bring him a big profit. Classification of exchange transactions can be carried out according to different criteria. So, according to the degree of conditionality, transactions are distinguished - firm and conditional, and according to the time of execution - cash (or cash) and urgent. From the link you can get more detailed information about:
So, stock speculation in the stock and commodity markets can be carried out with the help of cash and futures transactions. At cash transaction payment occurs immediately or within the next 2-3 days. Futures transactions are transactions with deferred terms for the execution of a contract. That is, the deal is concluded today, and the date of its execution comes after a certain period. Because of the smaller opportunities compared to the futures market, and therefore the lower profit, speculators usually prefer the futures market. Due to only two, but very significant limitations, it is the derivatives market that is the native element of exchange speculators.
Limitations on speculation in cash transactions:
On each exchange, speculators are represented by two types:
"Bulls"- exchange players playing for "increase". Anticipating an increase in the value of assets and contributing to this, they buy them in advance in order to sell them profitably later. The nickname "bulls" is associated with the desire of players to raise the price of "horns". The name "bull market" (Bull market) refers to a market in which there is an increase in prices.
The classic example of a constant bull is Warren Buffett. American billionaire, one of richest man in the world, he always bet on cheap purchases and expensive sales. Buffett's $10,000 investment in 1965 at Berkshire Hathaway turned into about $51 million by the summer of 1999.
"The Bears"- exchange players to "decrease". They enter into futures transactions (with a fixed price and delivery after a certain period of time) for commodities that they do not have in stock, with the expectation of buying them before the contract is settled at a lower price. The word "bears" reflects the fact that they put pressure on prices, causing them to fall. This is where the term "bear market" (Bear market) comes from - a market with a steady downward trend in prices over a long period of time.
George Soros is a classic example of a mindful bear. He managed to earn billions on currency speculation thanks to an interesting feature of the market: stock quotes rise slowly and with difficulty, and fall quickly and easily. Soros himself says that he likes to open sell positions and make money on a fall.
As can be seen from the above examples, speculative profits are possible when playing both up and down. At the same time, it should be emphasized that losses are possible in speculative operations, very often significant. Therefore, engaging in speculative investments is a job for professionals with a high degree risk.
We list the assets that are objects of exchange speculation:
The most understandable asset for most beginners. Probably because many people associate it with the "currency exchange" windows of commercial banks. All those who are mistaken will have to be disappointed, real currency trading is completely different.
Bonds.
They are rarely used as an asset for speculative investments, due to a slight change in price. In this regard, they do not compete with other, more convenient tools.
The favorite instrument of speculative operations of venerable bigwigs financial market. Most stocks on the stock exchange are bought for speculation.
Futures.
Derivative financial instrument for professionals. Compared to stocks, you can earn an order of magnitude more on futures contracts, as well as lose more.
Another derivative financial instrument of the stock exchange. It is of interest primarily to investors who want to limit their risks while maintaining sufficient profits.
The term "speculation" comes from the Latin word "speculatio", which means stalking, looking out. In the modern dictionary of foreign words, the term speculation is defined as:
1) Buying and reselling various goods at elevated prices with the goal of profit.
2) Purchase - sale of exchange values (shares, bonds, bills, etc.) with the task of obtaining speculative profit from the difference from the difference between the purchase and sale price (rate) when reselling these values.
3) Calculation based on something, intent aimed at using something for personal gain.
AT economics the concept of speculation is defined as making a profit by exploiting price differences over time.
Speculators are the largest but least fortunate group of participants in the futures market. Although there are no official statistics on the successes and failures of speculators in the futures markets, however, some expert assessments were still made. According to these estimates, only 10 to 30% of the total number of speculators had net profit in each year of its activity. But this does not prevent all new groups of participants in the futures market from trying their hand at speculative transactions.
The subject of speculative transactions is the trading of a deferred right to make and take delivery under a contract in order to extract a “price difference” due to changing conditions economic activity. Speculators, unlike hedgers, who seek to protect transactions from risk, take risks in an effort to obtain a certain profit.
In market conditions, speculation is an integral element of purchase and sale transactions, since, regardless of the will and desire of the parties, one of them ultimately receives an additional gain as a result of continuous price changes, while the other suffers losses.
Exchange speculation is usually carried out by members of the exchange and those who wish (usually individuals) to play on the difference in the price dynamics of futures contracts, but large corporations and banks acting through the same speculators can also participate in speculation.
In practice, there is no strict distinction between entities engaged in hedging and entities whose activities are related to exchange speculation, since participants in the real goods market are also engaged in exchange speculation, because in market economy the main thing is to make a profit, regardless of how exchange operations this goal is achieved.
In stock exchange textbooks stock speculators the following functions are defined:
§ Increasing market liquidity;
§ Relative smoothing of price fluctuations.
§ Taking part of the risk of investors or hedgers, depending on the market;
§ Competition.
There are two main types of speculators in the futures markets: shorts and bulls.
The game for a fall is carried out by selling futures contracts by speculators with the aim of their subsequent buyout at a lower price. The speculators involved in these transactions are called "bears".
Bull play is carried out by buying futures contracts with a view to their subsequent sale at a higher price. Speculators of this type are called "bulls".
Speculative profits are possible both when playing for an increase, and when playing for a fall. At the same time, in speculative operations, losses are also possible, often very significant. The speculator usually carries out short-term transactions. When he starts an operation, they say: he opens a position, when he closes, he closes the position. If a speculator buys securities, he opens a long position; if he sells, he opens a short position. (6)
Stock speculations are usually carefully planned and carried out according to pre-prepared scenarios, through careful preliminary activities, stretched over fairly long periods. Moreover, the excitement on the stock exchange is not necessarily organized by large stock exchange dealers. This role is usually assigned to small and medium-sized investors, who essentially pave the way for large stock exchange speculation. But they are already involved, as a rule, large corporations, banks, primarily investment, and other financial institutions. An increase in interest in general in certain securities or in shares and bonds of a company may be due to information about a merger with a larger partner, upcoming scientific and technical discoveries in a particular company, false information about business negotiations between companies on various issues ( on the distribution of state orders for large amounts). The dissemination of such information allows, in the end, to give a powerful impetus to appreciation, which may seem unpredictable. At the same time, it can be important to make a deal a few minutes before the end of the exchange, since the set rate becomes decisive for the next day or two. (8)
On the modern stock exchange, not only stocks, but also bonds of private companies and corporations have become the object of stock speculation. They are used for all kinds of fraud and fraud, allowing you to get speculative profits. For the purpose of speculating with bonds, special companies are created that build their business on fluctuations in interest rates. Commercial banks play a huge role in the organization and financing of such shell companies, which derive additional profit from transactions related to the provision of bonds on credit. Along with banks, other credit and financial institutions with substantial financial resources also participate. In this regard, a special place belongs to insurance companies. When making transactions with securities, market participants can conduct real, speculative or arbitrage transactions. Stock market speculation is a phenomenon as old as the stock market itself. Before explaining why speculators are attracted to the stock market, we should briefly look at why people speculate. There are two main motives in speculation: the possibility of profit and pleasure. Every speculator will agree with the first motive, but the second is often more important. Some people love risk, and stock speculation is inherently risky.
As a result, the question arises: is speculation different from gambling? Those who love speculative trading usually point out that in the game risk is created for the sake of risk, while speculation is a risk-taking mechanism that already exists. For example, no one needs to lose money or gain money depending on which card is drawn. Everyone can just refuse to play. However, someone has to lose or gain money, depending on whether the prices of stocks or bonds rise or fall, that is, whether the issuer of these securities or one of the speculators bears the risk.
The psychological motives of speculators do not differ significantly from the motives of gamblers. However, stock speculation does shift risk from those who don't want it to those who do. In other words, speculation in financial assets directs the desire for risk taking in an economically productive direction.
Stock trading has great appeal for those who are interested in the combination of excitement and the possibility of big quick profits. First, it presents extraordinary profit opportunities. Secondly, stock trading is technically a simple matter. You only need to call your account executor and within a few minutes your order will be executed. There are thousands of brokerage houses and many brokers ready to assist clients in their trading. Thirdly, stock transactions stimulate intellectual activity, they make it possible to analyze the market and anticipate its changes. (11) Exchange markets in themselves are interesting and informative. One of the first features that speculators discover is that very few events in the world do not affect stocks or currencies. Stock market speculation makes those who just want to make a profit more aware of the world in which they live.
Most speculators are attracted by the hope of quick profits, and not concern for the welfare of the economy, however, they perform several vital functions in the exchange markets that facilitate trading in stock values and financial instruments.
The presence of a large group of speculators on the exchange markets benefits both the exchange and the economy as a whole. The main functions that stock speculators have assumed are: increasing the liquidity of the market, the relative smoothing of price fluctuations.
Increasing market liquidity. Speculators are an important source of market liquidity. The constant flow of orders from stock speculators to the trading floor can significantly reduce the time for the appearance of counter orders to buy and sell. In a liquid market with a large number of sellers and buyers, it is possible to carry out transactions of any scale with a slight change in prices. At the same time, the arrival of speculators, by increasing the number of participants in transactions, promotes competition, and, as a result, more effective identification of an objective course. Relative smoothing of price fluctuations. The activity of stock speculators contributes to the relative stability of the market and generally eliminates price fluctuations, since the operations of speculators are often directed against the market, that is, against the main price trend at the moment. By buying assets at low prices, speculators help increase demand, which leads to an increase in price. The sale of assets by speculators at high prices reduces demand and hence prices.
Regulation of the exchange market or exchange activity is the regulation of the work of its participants on it and operations between them by organizations authorized by the company for these actions. The exchange can have both external and internal regulation. Internal regulation is the subordination of its activities to its own regulatory documents: The Charter, Rules and other internal regulatory documents that determine the activities of this exchange as a whole, its divisions and employees. External regulation is the subordination of the activities of the exchange to the regulations of the state, other organizations, international agreements.
Regulation of exchange activities is carried out by bodies or organizations authorized to perform regulatory functions. From these positions, there are:
State regulation of exchange activity, which is carried out by state bodies whose competence includes the performance of certain regulatory functions;
Regulation by professional participants in the securities market, or self-regulation of the market. There are two options here. On the one hand, the state can transfer part of its market regulation functions to authorized or selected by it organizations of professional participants in the exchange market. On the other hand, the latter can themselves agree that the organization created by them receives from them some rights of regulation in relation to all the founders or participants of this exchange or all exchanges;
Public regulation or regulation through public opinion; Ultimately, it is the reaction of broad sections of society as a whole to some actions on the exchange market that is the root cause for which certain regulatory actions of the state or market professionals begin.
The regulation of the exchange market has the following objectives:
Maintaining order in the exchange market, creating normal conditions for the work of all market participants;
Protection of market participants from dishonesty and fraud individuals or organizations, from criminal organizations and criminals in general;
Ensuring free and open process exchange pricing based on the concentration of supply and demand;
Creation of an efficient market, where there are always incentives for entrepreneurial activity and every risk is adequately rewarded;
Creation of new exchange markets, support of exchange structures, undertakings and innovations, etc.; impact on the exchange market in order to achieve some public goals (for example, lowering stock prices).
The process of regulation in the exchange market includes:
Creation regulatory framework its functioning, i.e. development of laws, regulations, instructions, rules, methodological provisions and other normative acts that put the functioning of the market on a generally recognized and observed basis by all;
Selection of professional participants of the exchange market; the modern exchange market is impossible without professional intermediaries who must meet certain requirements for knowledge, experience and capital established by authorized regulatory organizations or bodies;
Monitoring compliance by all market participants with the norms and rules of the market functioning; this control is carried out by the relevant control bodies;
The system of sanctions for deviation from the norms and rules established by the exchange; such sanctions can be: oral and written warnings, fines, criminal penalties, exclusion from the exchange members.
The principles of regulation of the exchange market reflect the time-tested world practice of the exchange market.
The main of these principles are:
Separation of approaches to regulation in relation to over-the-counter market participants, on the one hand, and to professional participants in the exchange market, on the other.
The maximum possible disclosure of information about everything that is done on the exchange market. Thus, not only the opportunity for market participants to obtain the information necessary for making business decisions is achieved, but the degree of trust in the exchange and its members increases;
Ensuring competition as a mechanism for objectively improving the quality of services and reducing their cost;
Prevention of combining rule-making and law enforcement in one governing body or regulation;
Ensuring transparency of rule-making, public discussion of market problems;
Principles of continuity of world experience Russian system exchange market regulation;
Optimal distribution of the functions of regulation of exchange activity between state and non-state governing bodies.
System state regulation stock market includes:
State and other regulations;
State bodies of regulation and control.
Forms government controlled market, which include:
direct, or administrative, management;
indirect, or economic, management.
Direct, or administrative, management is carried out by:
Adoption by the state of relevant legislative acts;
Registration of market participants;
Licensing of professional activities in the exchange market;
Ensuring transparency and equal awareness of all market participants;
Maintenance of law and order in the market.
Indirect, or economic, management stock market is carried out by the state through economic levers and capital at its disposal:
Taxation system (tax rates, benefits and exemptions);
monetary policy (interest rates, minimum size wages and etc.);
State capitals ( the state budget, off-budget funds financial resources and etc.);
State property and resources (state enterprises, Natural resources and land).
Main government bodies direct regulation of exchange activities:
Federal Commission on securities and stock market;
Federal Commission on Commodity Exchanges;
Ministry of Finance of the Russian Federation;
central bank Russian Federation.
The Federal Securities and Stock Market Commission directly regulates the activities stock exchanges. The Federal Commodity Exchange Commission exercises regulatory functions in relation to commodity exchanges and futures trading. The Central Bank regulates the activity of currency exchanges.
Ministry of Finance sets the rules accounting, issues government securities and regulates their circulation on stock exchanges.
For most of us, it causes some kind of unpleasant aftertaste. This, apparently, has remained since the 90s, when the so-called resellers were especially active. Talented businessmen bought where it was cheaper and sold where it was more expensive. But who said it's bad? Today, if not all, then very many people earn this way. Almost every type of business is one continuous speculation. We take cheaper - we sell more expensive. The difference in buying and selling is what it is. So why not apply this scheme in the stock market? It works great and gives a good profit. But more about everything.
Generally speaking, there are two ways to make money on stocks. First, build a good investment portfolio and receive dividends from profitable stocks. Secondly, sell your package of securities when their value increases, earning in this way on the difference in rates. If you buy shares to receive dividends in the future, you are. If you are doing this for later resale - . Is everything simple? No matter how. There is another definition. A speculator is one who earns on short-term transactions, that is, he sells and buys with great frequency. The investor is gaining for the future, hoping to sell shares and earn somewhere in a year or two.
In order to fully understand the terms, we will give a small analysis of what is happening in the minds of market participants. For example, how does a speculator think? “Company X quotes are going up. So, you need to buy shares of the company. Take it, hold it for a few days, get enough profit and close the position.” It is very rare when speculators keep shares for up to a year - this is rather an exception. How does an investor work? He does not rush to the first stocks that are rising in price. His task is to make a deep analysis of the situation and collect. As soon as he has chosen an industry and suitable for investment, a purchase is made. In the short term, the investor is not interested in the stock quotes of the selected company. For him, the future fate of the company as a whole, the ways of its development, growth, and increase in the volume of services are important. All this directly affects its future profits.
The main advantage of speculating in stocks is that they often bring quick and serious returns. There is no need to spend a long time analyzing the market and studying the prospects of a particular company. The speculator acts quickly, almost intuitively. He "licks" only cream, makes deals with shares, and goes home. He is not interested in how the company will develop in a year, two or ten years. He has already made his profit and that is enough. We must not forget that speculators are very important for the markets - they add liquidity to them and give a serious impetus to development and survival. A speculator is a risky person who is ready to give everything he has for the sake of profit. On the other hand, stock speculation does not have a very good effect on its stability. Frequent buying and selling without any logic introduces an imbalance in the market, which prevents "legitimate" investors from entering it normally. Speculators by their actions are able to independently "push" prices up or down. It is impossible not to note the huge risk of such a "work". Now you can earn thousands, and in an hour you can lose everything. Such is the fate of the speculator.
So what are they - speculators of our time? They walk next to us, live near us and even write articles. These are detraders and scalpers - the real "monsters" of the stock market. These are people who have something to respect. They are purposeful, disciplined, courageous and moreover - courageous individuals. Are there not many laudatory odes? - Not at all. As a rule, there are not so many smart speculators who are constantly in the “pros”. This is truly an achievement on a par with holding any ministerial position in ordinary life. And I'm not kidding - it really is. Any operation of a speculator is a serious risk. Practice shows that the number of position traders is getting smaller. Why do you think? It's too risky. It is much safer to conduct hundreds of trades a day. There is a higher chance of staying in the "pros" at least a little. Believe me, the risk is well rewarded. Stock fluctuations can reach 4-5% per day. If you have time to "catch" at least a tenth of such changes, you can have more than 100% profit per year (and this is the minimum). Do not disdain intraday traders and such a service as. What does it mean? Detraders receive multiple loans almost free of charge. No interest is charged for this, provided that the money is returned at the end of the day. Such an opportunity greatly increases the chances of raising your profit level. Can an ordinary investor dream of such a thing?!
A special "caste" among speculators is. In fact, they manage to skim the “cream” from the market dozens or even hundreds of times a day. Of course, he gets a small income from one trade (only a few pips), but in total he gets a great profit. The "weapon" of such a trader is not a scalpel, as you may have guessed, but bare hands and a cold mind. The operation of "scalping" takes no more than a few seconds. But this is enough to take what is yours and go home. Just imagine how much money you can get from hundreds of quality scalps?
The main task of the scalper is to carefully observe the window, the so-called “glass”, where all orders for buying and selling shares are visible. keeps track of supply and demand. As soon as the right moment comes, he makes a deal. If the scalper did everything right, then he went in the intended direction and the profit began to “drip”. The result - a few pipos in your pocket. If it was not possible to guess the direction, then the deal has to be closed, left without profit or even at a loss. No one knows how deep the market can go, and you don’t really want to take a big risk. Traders who are accustomed to intraday trading do not want to take risks. They believe that leaving a bet for several days is very dangerous. Indeed, there is no guarantee that the market movement will not change overnight. So you can stay without a deposit at all. The difference between evening and morning quotes can vary by 5-7%. If you do not have time to close on time, the loss can reach 10%. A real detrader will never take uncontrolled risks.
Each scalper has his own system - this is normal. But there are some rules that are common to all participants in the "speculative" market. Let's talk about each of them:
- firstly, try to make transactions only within one day. Open positions for the night - this is "death" for the deposit. Such a risk is unjustified even for a speculator;
- Secondly, never think for a long time when making a decision - act, relying solely on your experience and intuition. Naturally, we are not talking about opening positions at random. It is assumed that you already know the market very well;
- third, discipline must come first. If the plan is drawn up, act exclusively on it and do not step aside. You can analyze and reproach yourself for mistakes later;
- fourthly, while trading, try not to think about money, do not take profits and incomes very close to your heart. Otherwise, it only gets in the way;
- fifthly, keep in mind that short-term speculation with shares with low liquidity is unprofitable;
- At sixth, do not sit down to trade in stressful situations. If you lost, quarreled with loved ones, or just didn’t have a good day, postpone trading. 
Usually one operation of a trader lasts no more than 10-15 minutes. Dozens of such operations can be done in a day. But the number of open positions should not be the goal.
The main thing in this business is the efficiency of trade. It is necessary to “lead” several shares, and choose the most promising option for purchase at a particular point in time. And here it is very important to complete the transaction on all shares in a timely manner.
Think trading is easy? - You're wrong. Short-term speculators experience incredible stress during the day (primarily psychological), because constant concentration of attention is mandatory. But such people are able to cope with shocks, continuing to trade even after serious losses. Naturally, conclusions are drawn in such a situation, and mistakes are not repeated. Good luck.
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Ilya Roshchupkin, director of the BCS Premier branch in Chelyabinsk, told us what a speculative strategy in the stock market is, what are its main advantages and disadvantages, and also described the main "commandments" of the speculative approach to working in the stock market.
As a rule, stock market speculators are traders who earn on stock price movements in the short term. Those who buy securities for the long term are considered investors. In fact, speculative tasks are solved by everyone who aims to get a positive financial result due to changes in market quotes, regardless of what time scales they are guided by. Accordingly, trading strategies can be classified as long-term, medium-term, short-term, intraday and scalper.
At the same time, any trading strategy should provide clear answers to the following questions:
At what moment to open a position (where is the entry point)?
Where to take profit (take profit)?
Under what conditions should a position be closed at a loss (stop loss)?
What amount of capital will be used?
Will the position be supported (changes in profit and loss targets, depending on the dynamics of the market situation)?
In other words, speculative strategy- this is a clear trading algorithm that determines the sequence of actions of a trader to open and close positions.
Short-term strategies, as a rule, are based on technical analysis methods, scalping ones, most often, use the change in the momentary situation on world markets as the main reference points, as well as the interpretation of the supply-demand ratio, and medium-term and long-term ones are usually based on fundamental forecasts.
Of course, the algorithmic approach to speculative transactions requires a certain level of preparation from the market participant, some investment of time and (perhaps most importantly) emotional stability. But the financial results of such trade justify themselves. Unlike those who trade on intuition or on the news, system trading provides risk control, eliminates significant capital drawdowns and, ultimately, gives high returns regardless of the direction of price trends. It is the opportunity to earn not only on growth, but also on a fall that distinguishes short-term speculative trading from the widespread “buy and hold” approach of long-term investors (bought and hold).
The use of these strategies is most effective in conditions of a pronounced trend (it does not matter: growing or falling). During periods of development of lateral price movements, the profitability decreases, but still significantly exceeds the indicators of the main market indicators.
Despite the great variety of speculative strategies, there are several important general rules, which should be guided by this style of trading:
1. It is always necessary to follow a strictly defined trading plan, built on the basis of the strategy used;
2. If the trading system for a significant period of time (more than a month) began to consistently bring losses instead of profit, this means that certain changes have occurred on the market that are not taken into account in the trading algorithm. Therefore, the trading system needs to be optimized and revised. If the results do not improve after optimization, it is necessary to switch to another strategy.
3. For short-term trading, you can only use financial instruments With high level liquidity. Attempts to short-term speculation with "non-liquid" - a direct path to losses.
4. It is not necessary to develop a unique trading algorithm on your own. Brokerage companies offer a wide range of various speculative strategies to choose from with the possibility of additional advisory support when using them. You can also use ready-made trading robots.
5. The speculator of the stock market in any case must have a basic training in the field of exchange business. Before you start trading, you need to complete training.
BCS Premier
Chelyabinsk, st. Karl Marx, 48
* The name "BCS Premier" is used by the Joint Stock Company "BCS - Investment bank» as a trademark (service mark) to identify the services provided by the bank and is not its corporate name. Joint-stock company"BCS - Investment Bank". "General license of the Central Bank of the Russian Federation No. 101 of December 15, 2014"
