Trading Guerilla, More Crazy than Scalping
“Guerilla Trading” or Gorillas refers to the techniques used by nimble traders in and out of financial markets. Short Trading aims to generate quick profits while keeping risks at a minimum. The characteristic of a guerilla trader is to use a very short time frame even shorter than the scalper so that day traders will be seen as long term traders.
Trader guerilla usually takes only small profits in some transactions, its success depends on low commissions (if any), high leverage and most importantly, tight spreads. Guerilla trading techniques suitable forex trading, especially the main pair that has high liquidity and low spreads.
Characteristics of Trading Guerilla
Based on the above profiles, trading guerilla generally has the following characteristics:
Small or short timeframes
The average trading position for trader guerilla lasts only a few minutes. This is because the longer time spent in trading, the greater the risk that traders can get.
Small profit with a smaller loss limit
Trader guerilla is getting just 10 to 20 pips, compared to a scalper that may target more than twice this amount, or 25 to 50 pips. This means that the guerilla trader is not able to risk more than a few pips on a single trading position, with maximum losses being limited to as small as 5 to 10 pips.
Number of transactions a lot
A successful guerilla trader can do more than 20 to 25 trading positions in one trading session when conditions are conducive to trading. This generally occurs when important economic data such as monthly US payroll data or trade data are released.
Due to the short-term focus, guerilla traders usually rely on technical analysis and are adept at using tick charts or 1minute charts to determine entry and exit levels in the market.
Commission and low spreads
Due to the high volume of trading characteristics and small profits, trading guerilla relies heavily on low commissions and tight spreads.
Trading guerilla is usually an experienced trader who has enough trading intelligence that can last for several years. This is not recommended for beginner traders.
Trader guerilla puts stop loss only a few pips per trading, they may often choose not to trade when the market is too stable and the risk of loss is too great.