spread trading is an investment technique that allows those who use it to hedge against market risk. Thanks to spread trading, many investors have managed to earn significant sums of money, regardless of the evolution of the markets.
spread trading on Forex, as on other markets, is becoming increasingly popular among investors and is one of the most used techniques by hedge funds. This trend does not seem likely to stop, given the continued deterioration of investment funds.
The spread trading technique involves the simultaneous opening of a short and a long position on related instruments. In this way the trader is able to have a neutral position and earn money, without the market trend influencing him.
The idea behind the spread trading strategy is to minimize the risk of holding only one short position or one long position. The most common spread trading technique is to purchase a long and a short position on two stocks in the same sector.
Other forms of spread trading are: intramarket spread trading and intermarket. The first is based on the differential profit of the same market, while intermarket spread trading, as the same term says, on the spread of different markets.
However, in all types of spread trading the aim is the same: to try to be influenced as little as possible by trend changes in the market. The various types of spread trading can therefore be a protective shield for the trader and his capital.
Find out how to earn with spread trading and which are the most profitable techniques on the spread trading guide of Money.it.
