Guerrilla Trading
5paisa Research Team
Last Updated: 09 Jan, 2024 03:10 PM IST
![banner banner](/themes/custom/fivepaisa/images/banner-img.png)
![demat demat](/themes/custom/fivepaisa/images/demat-img.png)
Want to start your Investment Journey?
Content
- What is Guerrilla Trading?
- How Guerrilla Trading Works?
- Example of Guerrilla Trading
- Features of Guerrilla Trading
- Traits of Guerrilla Traders
- Conclusion
Guerrilla trading, being the concept, is gaining high popularity. With the growth of the internet and online trading platforms, more new and experienced traders are embracing the idea of guerrilla trading. So, let’s find out about guerrilla trading in detail, like what is guerrilla trading strategy, features, traits, etc.
What is Guerrilla Trading?
Guerrilla trading, or scalping, is a high-frequency trading strategy in financial markets. Traders employ this approach to make numerous quick daily trades to capitalize on short-term price fluctuations. Some of the key tactics include rapid decision-making, mastery of technical analysis, stringent risk management, and constant market awareness.
While it delivers the potential for quick profits, guerrilla trading demands intense focus, adaptability, and a keen understanding of market dynamics. This strategy is not for everyone, requiring a unique skill set and temperament to navigate the fast-paced and volatile nature of short-term trading.
How Guerrilla Trading Works?
It operates on the principle of exploiting short-term market movements. Traders execute quick, frequent daily trades, leveraging small price changes for profit. This strategy relies on swift decision-making, technical analysis, and strict risk management. Traders aim to capitalize on market inefficiencies, requiring constant vigilance, adaptability, and a comprehensive understanding of technical indicators. With a focus on minimizing overnight risks, guerrilla trading demands a disciplined approach, making it suitable for those who thrive in the fast-paced environment of rapid-fire trading.
Example of Guerrilla Trading
Consider a guerrilla trader executing numerous USD trades, limiting each to Rs200. With 20 trades and a modest risk of Rs10 per trade, the maximum potential loss would cap at Rs200. The trader, employing a strategy designed for favorable outcomes on most trades, aims to secure profits while keeping a vigilant eye on the limited downside risk. This tactical approach emphasizes the importance of quick, calculated decisions and showcases the trader's commitment to managing risks in the fast-paced landscape of guerrilla trading.
Features of Guerrilla Trading
1. High-Frequency Trading: Guerrilla trading strategy is characterized by its rapid pace, involving a high volume of trades executed within short time frames, often minutes or even seconds.
2. Technical Analysis Emphasis: Successful guerrilla traders rely heavily on technical analysis tools and indicators, such as moving averages, to identify short-term market trends and make quick, informed decisions.
3. Strategic Risk Management: Given the frequent trading, guerrilla traders employ meticulous risk management strategies, including tight stop-loss orders and strict position sizing, to control potential losses and protect their overall portfolio.
4. Adaptability and Market Awareness: Guerrilla traders stay alert to market news and events, adapting their strategies to swiftly capitalize on sudden price movements and opportunities, showcasing a keen awareness of the ever-changing market landscape.
Traits of Guerrilla Traders
1. Quick Thinking: Guerrilla traders are like nimble chess players in finance. They make decisions in the blink of an eye, analyzing market conditions on the go.
2. Tech-Savvy Wizards: These traders are masters of charts and indicators. They use tools like moving averages and RSI to decipher complex market patterns, helping them spot opportunities and make strategic moves.
3. Risk Management Gurus: Guerrilla traders play it smart with their money. They set tight limits on how much they will lose in each trade, ensuring that one bad move doesn't sink the ship.
4. Always On Alert: These traders are like financial ninjas, constantly aware of what's happening in the market. They watch news, economic reports, and anything else that could impact their next move.
5. Adaptable Commanders: Markets change quickly, and guerrilla traders are ready for anything. They adjust their strategies on the fly, ensuring they're in sync with the ever-shifting dynamics of the financial battlefield.
6. Stress-Resistant Warriors: The fast-paced world of guerrilla trading can be intense, but these traders thrive under pressure. They keep cool heads and steady hands, even when the market gets wild.
Conclusion
To do well in guerrilla trading, keeping your losses small is crucial. The idea is that when you make profitable trades, they should outweigh the losses you might incur. One smart guerrilla trading strategy for guerrilla trading is to use automatic stop losses. These act like a safety net, automatically selling your assets if they're about to dip too much, helping you avoid big losses. So, by managing your losses wisely and using tools like automatic stop losses, you're setting yourself up for a better chance at success in guerrilla trading.
More About Stock / Share Market
- Tracking Stock: Overview
- Variable Cost
- Fixed Cost
- Green Portfolio
- Spot Market
- QIP(Qualified Institutional Placement)
- Social Stock Exchange(SSE)
- Financial Statements: A Guide for Investors
- Good Till Cancelled
- Emerging Markets Economy
- Difference Between Stock and Share
- Stock Appreciation Rights(SAR)
- Fundamental Analysis in Stocks
- Growth Stocks
- Difference Between ROCE and ROE
- Markеt Mood Index
- Introduction to Fiduciary
- Guerrilla Trading
- E mini Futures
- Contrarian Investing
- What is PEG Ratio
- How to Buy Unlisted Shares?
- Stock Trading
- Clientele Effect
- Fractional Shares
- Cash Dividends
- Liquidating Dividend
- Stock Dividend
- Scrip Dividend
- Property Dividend
- What is a Brokerage Account?
- What is Sub broker?
- How To Become A Sub Broker?
- What is Broking Firm
- What is Support and Resistance in the Stock Market?
- What is DMA in Stock Market?
- Angel Investors
- Sideways Market
- Committee on Uniform Securities Identification Procedures (CUSIP)
- Bottom Line vs Top Line Growth
- Price-to-Book (PB) Ratio
- What is Stock Margin?
- What is NIFTY?
- What is GTT Order (Good Till Triggered)?
- Mandate Amount
- Bond Market
- Market Order vs Limit Order
- Common Stock vs Preferred Stock
- Difference Between Stocks and Bonds
- Difference Between Bonus Share and Stock Split
- What is Nasdaq?
- What is EV EBITDA?
- What is Dow Jones?
- Foreign Exchange Market
- Advance Decline Ratio (ADR)
- F&O Ban
- What are Upper Circuit and Lower Circuit in Share Market
- Over the Counter Market (OTC)
- Cyclical Stock
- Forfeited Shares
- Sweat Equity
- Pivot Points
- SEBI-Registered Investment Advisor
- Pledging of Shares
- Value Investing
- Diluted EPS
- Max Pain
- Outstanding Shares
- What are Long and Short Positions?
- Joint-Stock Company
- What are Common Stocks?
- What is Venture Capital?
- Golden Rules of Accounting
- Primary Market and Secondary Market
- What Is ADR in Stock Market?
- What Is Hedging?
- What are Asset Classes?
- Value Stocks
- Cash Conversion Cycle
- What Is Operating Profit?
- Global Depository Receipts (GDR)
- Block Deal
- What Is Bear Market?
- How to Transfer PF Online?
- Floating Interest Rate
- Debt Market
- Risk Management in stock Market
- PMS Minimum Investment
- Discounted Cash Flow
- Liquidity Trap
- Blue Chip Stocks: Meaning & Features
- Types of Dividend
- What is Stock Market Index?
- What is Retirement Planning?
- Stock Broker
- What is the Equity Market?
- What is CPR in Trading?
- Technical Analysis of Financial Markets
- Discount Broker
- CE and PE in the Stock Market
- After Market Order
- How to earn 1000 rs per day from the stock market
- Preference Shares
- Share Capital
- Earnings Per Share
- Qualified Institutional Buyers (QIBs)
- What Is the Delisting of Share?
- What Is The ABCD Pattern?
- What is a Contract Note?
- What Are the Types of Investment Banking?
- What are Illiquid stocks?
- What are Perpetual Bonds?
- What is a Deemed Prospectus?
- What is a Freak Trade?
- What is Margin Money?
- What is the Cost of Carry?
- What Are T2T Stocks?
- How to Calculate the Intrinsic Value of a Stock?
- How to Invest in the US Stock Market From India?
- What are NIFTY BeES in India?
- What is Cash Reserve Ratio (CRR)?
- What is Ratio Analysis?
- Preference Shares
- Dividend Yield
- What is Stop Loss in the share market?
- What is an Ex-Dividend Date?
- What is Shorting?
- What is an interim dividend?
- What is Earnings Per Share (EPS)?
- Portfolio Management
- What Is Short Straddle?
- The Intrinsic Value of Shares
- What is market capitalization?
- Employee Stock Ownership Plan (ESOP)
- What is Debt to Equity Ratio?
- What is a stock exchange?
- Capital Markets
- What is EBITDA?
- What is Share Market?
- What is an investment?
- What are bonds?
- What Is a Budget?
- Portfolio
- Learn How To Calculate The Exponential Moving Average (EMA)
- Everything about the Indian VIX
- The Fundamentals of the Volume in Stock Market
- Offer for Sale (OFS)
- Short Covering Explained
- What Is The Efficient Market Hypothesis
- What Is Sunk Cost: Meaning, Definition, and Examples
- What Is Revenue Expenditure? All You Need To Know
- What are operating expenses?
- Return On Equity (ROE)
- What is FII and DII?
- Everything you need to know about the Consumer Price Index
- Everything You Need to Know About Blue Chip Companies
- Know Everything About Bad Banks And How They Function.
- The Essence Of Financial Instruments
- Everything You Need to Know About How to Calculate Dividend per Share
- Double Top Pattern
- Double Bottom Pattern
- What is the Buyback of Shares?
- Trend Analysis
- Stock Split
- Right Issue of Shares
- How To Calculate the Valuation of a Company
- Difference between NSE and BSE
- Learn How to Invest in Share Market Online
- How to Select Stocks for Investing
- Do’s and Don’ts of Stock Market Investing for Beginners
- What is Secondary Market?
- What is Disinvestment?
- How to Become Rich in Stock Market
- 6 Tips to Increase your CIBIL Score and Become Loan-worthy
- 7 Top Credit Rating Agencies in India
- Stock Market Crashes In India
- 5 Best Trading Books
- What Is the Taper Tantrum?
- Tax Basics: Section 24 Of The Income Tax Act
- 9 Read-worthy Share Market Books for Novice Investors
- What is Book Value Per Share
- Stop Loss Trigger Price
- Wealth Builder Guide: Difference Between Savings And Investment
- What is Book Value Per Share
- Top Stock Market Investors In India
- Best Low Price Shares to Buy Today
- How Can I Invest in ETF in India?
- What is ETFs in Stocks?
- Best Investment Strategies in Stock Market for Beginners
- How To Analyse Stocks
- Stock Market Basics: How Share Market Works In India
- Bull Market Vs Bear Market
- Treasury Shares: The Secrets Behind The Big Buybacks
- Minimum Investment In Share Market
- What is Delisting of Shares
- Ace Day Trading With Candlestick Charts - Simple Strategy, High Returns
- How Share Price Increase or Decrease
- How to Pick Stocks in Stock Market?
- Ace Intraday Trading With Seven Backtested Tips
- Are You A Growth Investor? Check These Tips to Increase Your Profits
- What Can You Learn From The Warren Buffet Style of Trading
- Value or Growth - Which Investment Style Can be the Best For You?
- Find Why Momentum Investing is Trending Nowadays
- Use Investment Quotes to Improve Your Investment Strategy
- What is Dollar Cost Averaging
- Fundamental Analysis vs Technical Analysis
- Sovereign Gold Bonds
- A Comprehensive Guide To Learn How to Invest In Nifty In India
- What is IOC in Share Market
- Know All About Stop Limit Orders And Use Them To Your Benefit
- What is Scalp Trading?
- What is Paper Trading?
- Difference Between Shares and Debentures
- What is LTP in the Share Market?
- What is Face Value of Share?
- What is PE Ratio?
- What is Primary Market?
- Understanding the Difference between Equity and Preference Shares
- Share Market Basics
- How to Choose Stocks for Intraday Trading?
- What is Intraday Trading?
- How Share Market Works In India?
- What is Scalp Trading?
- What are Multibagger Stocks?
- What are Equities?
- What is a Bracket Order?
- What Are Large Cap Stocks?
- A Kickstarter Course: How To Invest In Share Market
- What are Penny Stocks?
- What are Shares?
- What Are Midcap Stocks?
- Beginner's Guide: How to Invest in the Share Market Successfully Read More
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing. For detailed disclaimer please Click here.
Open Free Demat Account
Be a part of 5paisa community - The first listed discount broker of India.
Frequently Asked Questions
Guerilla Trading was founded by Joshua Bunker, who also hosts a YouTube channel.
The effectiveness of guerrilla trading depends on an individual's skills, risk tolerance, and market conditions. While some succeed with its rapid, short-term approach, it may not suit everyone.