Should a trader invest aggressively?

A common question is which execution style a trader should follow in order to reach the desired profit acknowledging, of course, the risks associated with online trading. We may not be able to provide a clear answer, but there are important parameters that must be considered. Your trading style may be affected by several factors, such as timing, how much capital you have, and what risk you're prepared to take.

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An aggressive or prudent trading strategy?

Often, those who consider themselves conservative traders choose to buy assets with an annual growth rate of around 10 per cent, estimating that the risk would be less because lower profits tend to have lower declines. Generally speaking, these conservative traders can assume that more profitable assets with annual growth exceeding 60% may be able to make significant profits, but they may also offer larger concessions. So, if the market turn against you, the losses will be much higher, and this will have an even greater impact on your buying power.

A more aggressive trading strategy generally refers to a style of portfolio management that seeks to maximize returns by assuming a relatively higher level of risk. How aggressive a trading strategy depends on the portfolio's relative exposure to high-risk assets.

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You have 100% control over your trading style

CFD trading might be a very "simple" means of making money. You will note that I did not say "easy", but I did say "simple". Why? Because it can provide your trading portfolio with a diversified advantage while mitigating the risk exposure of your assets. A portfolio of low-risk assets may be selected and built up with a few small profits in mind. The sum of those gains will far exceed what you think.

The general concept of such an approach is that a portfolio of low-risk assets will provide higher long-term returns and reduce the risk posed by any individual asset or security. Diversifying is necessary to maintain a low-risk portfolio. 

Does this mean that more aggressive management cannot generate profits? This is not what we are implying. More aggressive management may also generate profits. However, it’s important to understand the heightened risk you take when executing such a strategy. XPro Markets can give you the tools and resources you need to experience the depths of global markets.

Which executing style suits you? 

Whether you see yourselves as a conservative trader or have a more aggressive style, here at XPro Markets we're with you whenever you need us, offering more than 160 CFD assets, such as Forex, Commodities, Indices, Cryptocurrency Futures to help you make progress in the world of trading.