Exploring the Niche-Based Trading Strategy

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There are definitely some people all around the world who are seemingly still getting roped into super-expensive trading courses sold by so-called expert traders who make more of their money selling these classes than they do actually trading, but thankfully it seems to be dying down. It’s not quite as widespread as it was, which brings into focus the fundamentals of trading, which is of course that at the end of the day your success comes down to you as the individual. No amount of training from even the top experts will guarantee your success, even if you attempted to copy every single action they took playing the markets – it’s technically impossible to replicate every single action of a top-trader at the exact same time that they do, in the exact same manner.

There are just too many variables to have to deal with, which is perhaps one of the main reasons why Economics could probably never come close to resembling anything like an exact science. As much as there are some great trading approaches and strategies which will arm any diligent trader with the tools they need to succeed, it ultimately comes down to your implementation, which in-turn comes down to decision-making.

With that in mind (decision-making), an emerging trading strategy comes to mind which will help you make better decisions around the trades you execute (or those which you elect not to execute). After all, the emotional aspect of the nature of humans cannot help but creep into even the most collected of trader’s thoughts, so it helps when you have a set of solid go-to indicators which can help you take decisive action at the right time.

How it works

So, as the term suggests, the niche-based trading strategy is driven by a focus on a specific niche, which is perhaps nothing new if you look at it from the point of view of the traditionally defined trading strategies such as swing trading, which falls under the analysis of trends. More specifically some traders already focus on a specific basket of stocks they trade which are perhaps from one specific sector, industry or market, but niche-based trading takes things a step further and drills a little deeper.

Niche-based trading incorporates the traditional corporate operational structure to the process of selecting instruments to trade, so you first endeavour to set up a hypothetical corporate structure but one which will theoretically operate just like one that is operating in the “real” market. For example, go through all the motions of running a business in a specific niche you selected, but instead of making decisions that are to be implemented physically, you would rather implement them using your Metatrader 4 account platform.

What would a textiles retail business do for instance if there was news in the market of an imminent current shortage of the raw materials which supply that business? Instead of the reaction being implemented physically, well because you’re not physically running an actual textiles retail business, you would implement your reaction in the markets via your trades.