The Best Alternative Trading Strategies In 2023

Last Updated March 11th 2023

5 Min Read

Far too many people compare trading to gambling. But are these two industries similar? For starters, both sectors require strategizing. You can’t just make a trade blindly and expect to make money.

Secondly, a little bit of luck is required in both. From a legal standpoint, you need to be above 18 years to become a trader. This is the standard age in almost every country.

If you want to gamble on sports or play casino games, though, you must attain the required gambling age in your state. OceanLaw.com explains more legal gambling in the US.

In this article, however, we’ll focus on day trading. We’ll explain the strategies you can follow to increase your profits. You can combine one or more techniques. But test-drive each system through a paper account before you become comfortable risking your own money.

Alternative Trading Strategies

Trend Trading

This strategy is exactly what it sounds like. You trade in the direction of the market. If it’s crashing, you conduct short trading. Once the market reverses into a bull market, you buy low and sell high.

Trend marketing is the most recommended strategy out there. That's because it doesn't need a lot of learning. All you need is to figure out the market’s direction. Let’s say bitcoin has been rising for the past two months.

It means crypto is experiencing an uptrend. As such, you should look for buying opportunities when bitcoin goes down slightly and sell your coins after it gains significant value.

The amount of time you want to spend holding your position is up to you. You can trade on the hourly, daily, or weekly candles. The only requirement is to follow the market.

Range Trading

Ever looked at the market and realized it had no clear trend? That's actually a common occurrence. The stock, forex, and crypto markets spend more time consolidating than following a clear up or down trend.

That’s okay, though. You can make money by trading within the market’s range. Maybe a certain stock has been ranging between $20 and $25. You can set buy orders at around $21 and sell slightly below $25.

Of course, you can trade both ways—place short orders when the stock rises above $24 and buy back before it hits the lower range of $20. Set stop-loss limits, though, because you never know when the market could break an area of resistance.

Use trading tools to help you get into trades at the right time. Also, consider price action—making a move only after the candles confirm a change in the market.

News Trading

This may sound obvious to some, but the forex, stock, and crypto markets are heavily influenced by worldly events. So, the federal government has increased interest rates? Expect a dip in prices.

Did Tesla just say it will start accepting bitcoin? The market will probably respond with a price hike. News trending can help you get into trades before the prices explode.

But you must know what news moves the needle. Interest rates, consumer surveys, inflation status, and business acquisitions can all sway the movement of the price markets.

But you must stay ahead of everyone else. If you're a crypto trader, keep up with upcoming crypto projects, meetings, and updates. Most coins tend to gain value before a major update or after a partnership with a well-known organization.

In the usual style, timing is everything. Get in too early and you may not make money if the news doesn’t change price movements. Get in too late and you risk missing out on a lot of money.

Swing Trading

Swing trading involves holding onto positions for a few days or weeks. Let’s say you think the dollar will continue to gain value against the euro for a month. You can buy dollars and keep your position open for a couple of weeks.

Swing trading promises significant profits to patient traders. But it's not risk-free. Prices fluctuate all the time. As such, it's in your best interest to follow price action and know when to get out of trades.

Set take-profit and stop-loss limits. This way, you can get out of a trade with some profits, even if that means closing your position a little bit too early.

Scalp Trading

Scalp trading is the opposite of swing trading. Here, you open and close positions quickly, usually within the one-minute, five-minute, 30-minute, or one-hour candles.

The goal is to make small profits frequently. Let’s say you make trades within the 15-minute candles. You can 10 or more times during the day. And if you can make profits with 70% of your trades, you will end up with a decent profit.

With that said, scalping is for day traders. You must be in front of your computer for a few hours or the entire day to make money as a scalper. Also, you need a trading platform with low fees and a fast platform. You don’t want to lose money because the system took too long to close your position.

Position Trading

Position trading involves getting into a trade and holding your position for weeks, months, or years. This strategy requires an in-depth knowledge of macroeconomics. It also requires a lot of patience.

You need to know what's happening in the world and how different events may affect the prices of stocks, crypto, or currencies. If you think the Russian ruble will crash for weeks, then you can enter a long-term short position. If you think bitcoin is getting into a bull trend, you can buy long and hold your position for a long time.

Retracement Trading

A retracement is also known as a correction. It occurs when an asset is moving in a certain direction but briefly retraces to a previous area of support or resistance. Let’s say Solana cryptocurrency breaks resistance at $20 and rises to $25.

Then it meets a new area of resistance and retraces back to $20. You can enter a long position hoping the coin will go up again. Alternatively, you can get into a short trade at $25 and close it at $20, its expected support area.

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