Posted in Finance, Accounting and Economics Terms, Total Reads: 511
Definition: Guerilla Trading
Guerilla trading refers to the trading strategy used by traders who enter and exit the market at short intervals at high frequency and wants to generate small profits, keeping their risk at minimum. Typically Guerilla traders are characterized by durations even shorter than scalping and usually last for not more than a few minutes, thus making day traders look like long term investors.
As the objective of guerilla trader is to earn small profits by trading several times, such trades are characterized by high leverage, tight trading spreads and low commissions. Such trades also require high trading expertise and hence are not recommended for novice traders. Guerilla trades are usually based on a unique breed of stocks that flash a unique set of technical signals before surging into a new trading range. Thus Guerilla traders need to identify these signals for ideal investing opportunity again and again.
Guerilla trading can be applied to any financial market but is particularly suited for forex markets. It is so because major currency pairs have very tight trading spreads and plentiful liquidity.