5 Most Profitable Trading Methodologies to Use In 2024

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People around the world are becoming tired of their “9-5” jobs. Because of that, they are looking for creative ways to make money. Some people decide on starting a private business. The advanced technology brought certain advantages that are making things easier for beginners. Logically, you should know how to use those advantages in the right way.

However, entrepreneurship is not the only field that benefits from the Internet. People more actively start to participate in the trading industry. Becoming a good trader isn’t as easy as you might think. You primarily need to improve theoretical knowledge of this theory. Yet, even that won’t allow you to become a pro in this field. Understanding how the trading system in the world functions requires hard work. The hard work will sooner or later bring you the experience necessary to make a profit.

Still, be aware of the mistakes that you will potentially make. Those mistakes will be the most valuable lessons you can get. More precisely, it will tell you which trading methodology is perfect for you.

Defining the “most profitable trading methodology” is not quite possible. People use different strategies to recognize some price changes and increase the amount of money they earn. Because of that, we would like to analyze a couple of them and let you decide which one meets your expectations and requirements.

1. Forex Affiliate Programs

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Forex brokers offer different affiliate programs that can increase your income. As a user, you are staring a collaboration with them by using this tool. There are two different ways of how you can earn money in this way.

The first option is to earn a portion of the spread. In other words, you are getting the percentage of money that broker makes. The percentage varies from 30 to 70 percent depending on which program you choose. Despite that, some programs offer a fixed rate for one full lot. The money you can also depend on the partners you choose.

We are that Forex affiliate programs are a relatively new subject for you. Because of that, before participating in them, it would be good to get familiar with them. If you are willing to find out more, we recommend you click here.

2. Scalping

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In short terms, we can describe scalping as the quickest strategy employed by active traders. This methodology includes different types of price gaps. However, the cause of these gaps can be different. It can be order flow and bid-ask spread. The purpose of the strategy is to help you buy or make the spread at the bid price. After that, it helps users to sell at the asking price and receive the difference between both price points.

Despite that, there is one more thing that we have to highlight about scalpers. Neither of them tries to move high volumes or exploit large moves. They will all strive to take advantage of the small moves. When these changes are small, they usually occur frequently and the smaller volumes arise more often.

If you plan to use this methodology, the perfect place for trading would be liquid markets. As we said, the profit per trade is not big and you won’t make a fortune from it. However, liquid markets will always increase the frequency of the trades. Turbulent markets are something you should maximally avoid.

3. Swing Trading

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The strategy of Swing trading is a great choice when the trend breaks. Each time when a certain trend ends, the new trend will try to establish itself. Logically, the result of that happening is price volatility. That is the moment when Swing traders react. Their goal is to sell or buy when the price volatility sets in.

Still, you need to understand that this way of trading is not easy. You will have to do some fundamental and technical analysis before creating a particular set of rules. Those rules will give you directions when the right moment to buy or sell is. Logically, the algorithm you use won’t always be precise. Make sure you weigh up the options at VectorVest first.

Because of that, you will need to find a market that goes in the same direction without any excuses. For instance, sideways or range-bound markets are risky for this type of traders.

4. Position Trading

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One group of people will tell you that position trading is not the type of active trading. Yet, this depends a lot on how experienced you are as a trader. It might be a good option for complete beginners to decide on some other methodology. However, if you believe in your skills, continue reading.

This type of trading daily and monthly charts and combines them with some other trading methods. In this way, you will get the chance to find out the trend of the current market direction. Indeed, this methodology is a bit time consuming because it can last for a couple of weeks.

Your goal should be to look for lower and higher highs. These insights will confirm whether a market you analyze is safe for trading or not. If you manage to do that promptly, you will benefit from down and upsides of the market movements.

Despite that, this type of traders doesn’t tend to forecast any price levels. As we said, their only goal is to determine the direction of the market. Each time when the trend breaks, position traders exit the position. The directions we gave you is something you should follow. When market volatility is high, trend trading is extremely tough. Because of that, improve your knowledge and experience before participating in this type of trading system.

5. Day Trading

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We left the most popular active trading methodology for the end of this article. More precisely, people not quite familiar with this subject will tell you that day trading is the pseudonym for active trading. You can easily conclude what day trading is. Traders that use this strategy are selling and buying securities on the same day.

All the positions are closed, and trading over the night is not held at all. In theory, this may seem like an easy way to make money. However, that is far away from the truth. People that are using this methodology are usually professionals or even market makers.