Trading is a good place to look if you’re looking to reduce your debt. Since trading can come with losses it is vital to know what you’re doing and be versed on the different styles of trading. There are many low risk trading styles and today we will go through 5 of them and tell you the pros and cons of using these trading styles to reduce your debt. You will need to make sure you use a reliable broker like CMC Markets for example.
- Swing Trading
To start of with is swing trading, swing trading is short-term style of trading. If you are looking to reduce debt short-term trading is the way to go as you will see results quickly. Positions in swing trading are held to hold onto short-term moves in the market. When a target is achieved, trades are exited. This style of trading usually takes a few days. This means it isn’t something you need to invest in long-term. This can take away the stress of loss as you are seeing results in such a short time. Another pro of this trading style is that it does not need to be constantly monitored. This means you do not need to have lots of spare time to do this style of trading. Sadly, a disadvantage of this trading style is that you need to be knowledgeable in technical analysis. This could take some time to learn and may take away the perks of this being a short-term en-devour.
- Day Trading
Next, on the list is day trading. Day trading, as you could most likely guess from the name is another short-term style of trading that takes place within a single day. Positions are entered and exited on the same day making this an extremely short-term style of trading; perfect for reducing debt. This is a perfect style for anyone looking to get in and out of trading with lightening fast results. However, like with most of these styles; prior knowledge in technical analysis is needed. Also, unlike swing trading; day trading needs to be monitored constantly. If you are busy or have a full-time job, day trading probably isn’t for you due to the time needed to receive any significant results.
- Scalp Trading
Our 3rd style of trading to help you reduce debt is scalp trading. This style of trading is for making small gains which may be a positive or benefit depending on your debt and how you look at it. This fast paced style of trading is not for the fainthearted as there can be significant chance throughout the day. However, despite this it is a good, low-risk style of trading and losses are relatively small so you don’t have to worry about creating even more debt for yourself. Again, this style of trading involves constant monitoring so it will eat up a fair amount of your time and may not be viable for busy people. In scalp trading you have to be focused and constantly aware of what is happening, so if this isn’t your strong suit this might not be the style for you.
- Trend Trading
This next style of trading is slightly more long-term but could be the big winner for you. Trend Trading consists of following the trends in the news. It is as easy as that. Trend trading stocks can be great for a certain amount of time but they tend to fizzle out pretty quickly. However, this might be a positive for you if you only need to trade for a short amount of time to reduce your debt. Unfortunately, following the trends isn’t always the best way of doing things. Big news outlets can be incorrect a lot of the time and nobody really knows what stocks are going to trend accurately.
- Breakout Trading
Last but not least is breakout trading. Breakout is a short-term trading style where you identify the breakout and trade in the direction of it. Compared to many of the other styles we have looked at this one is a lot simpler. It does not take prior-knowledge and it is not hard to identify a breakout. This makes breakout trading a magnificent option for a beginner. However, be aware that breakouts don’t always go the way you want them to.