Day trading is a style of speculative trading in which traders open and close positions within the same day. Traders may take profits or losses anywhere between two days to a few hours after buying or selling prices. Day trading can be hazardous and requires both time and money to make the right purchases at the right time.
The Dubai market currently has many volatile cryptocurrencies and access via brokers such as CMC Markets which allow you to trade Bitcoin, Ethereum, Litecoin, Bitcoin Cash, etc., with competitive fees based on spreads rather than commission.
Cryptocurrencies are attractive for Dubai traders because they have a 24-hour market and can be bought based on the fluctuations of their value concerning fiat currencies.
Technical Analysis
Technical analysis is a method traders use to predict future price movements of a security. It involves studying the patterns and market information available on past trading sessions.
Technical analysts believe that all relevant information is reflected in a stock’s price, so they can study historical data to look for repeating patterns and make forecasts accordingly. Technical analysis has become popular with day traders because it uses simple observation of supply and demand to forecast where prices will move next.
Fundamental Analysis
This strategy requires looking at factors including but not limited to economic, financial, political events or market changes that may affect the value of an asset class such as cryptocurrencies. Fundamental analysis looks back at what has happened to determine why something may happen in the future.
Although this strategy is more complex, many traders believe in it because it focuses on the intrinsic worth of an asset rather than its market fluctuations.
Arbitrage
Arbitrage exists when a trader can take advantage of differing prices for the same thing between two different markets. Traders who can identify price differences can buy at one price and sell at higher prices, thus making a profit. Cryptocurrency arbitrage mainly occurs between exchanges with multiple currencies or fiat trading pairs. For example, if BTC = 1000 dirhams on one exchange but only 950 dirhams on another, you could trade your lower-priced dirhams for more BTC and then sell them on the other exchange where they will be worth more.
Swing Trading
This strategy involves identifying a trading range and looking for a breakout in either direction. This strategy is best used with short-term holding periods to make quick profits. The trader will seek high-probability breakouts from established trading ranges. They will then hold until the price has come close enough to test the validity of their breakout trade.
Scalping
Scalping is a popular day trading strategy that involves placing many trades throughout the day with slight gains per trade but making large trades. To be successful at scalping, traders need to understand how much a currency has moved over a given period—the more volatile it is, the better your chances of success in this area. Traders also have to be aware of fees and decide whether or not they are worth the risk.
Holding and diversification
In this strategy, traders hold a large amount of capital in a single stock or asset class, thus ensuring they have a great deal to gain and a lot to lose. It is a precarious strategy because it requires being wrong about price movements twice when buying and again when selling. For example, if someone holds 100 BTC (10 000 dirhams) assuming that the prices will rise, then sell later for double that price (20 000 dirhams), they would be assuming that BTC doubles in value in the future.
This strategy only works if the money is used for speculation and not practical use (buying food, making payments). If these assumptions were incorrect, they would be in severe debt or completely broke.
Margin Trading/Leverage
Margin trading is when traders borrow funds from their broker to buy an asset they usually cannot buy with their funds. This strategy can be one of the most profitable when done correctly, but it is risky because it requires diligent monitoring of trade activity and withdrawals. With margin trading, you can open a position with a higher potential return than your total buying power would allow.
You can find more info here.
