Top traders and investors use the best strategies to dominate and conquer the markets. They also pay heed to practical hacks like staying informed and taking all the precautions needed to avoid common mistakes like poor risk management. This guide will help you follow in their footsteps and become a formidable investor.

Top Strategies for Portuguese Investors

The most successful Portuguese investors rely on these strategies:

1 - Day trading

In Portugal, many traders are into day trading. In other words, they trade different financial instruments on credible platforms like the ones listed here within the same trading day. As a day trader, you interact with the market throughout the day and close all positions before the markets close.

Day trading is immensely popular for several reasons. Most people prefer this strategy because it allows them to trade multiple times a day and accumulate significant returns. Plus, day trading enables them to avoid issues that can arise when traders hold positions overnight, including market gaps and hefty rollover fees.

2 - Swing trading

If you’d like to hold positions for an extended period, like several days or weeks, and cash out when asset prices hit the best limits, try swing trading. With this strategy, you don’t have to trade or monitor your positions throughout the day. You can just open positions, set stop-loss and take-profit orders, and go about your day.

Swing trading’s popularity is primarily based on the strategy’s less intensive nature compared to alternatives like day trading. As a swing trader, you can dabble in trading while working a 9-5, running a business, raising a family, and more. You won’t have to stay glued to your computer or phone’s screen all day.

3 - CFD trading

CFD trading is a strategy that enables you to speculate on different securities’ price movements without owning the underlying assets. The best thing about CFD trading is most of the brokers that cater to Portuguese support it. In fact, many service providers focus primarily on CFDs, meaning they don’t allow their clients to buy and own actual assets.

Another aspect that draws millions of Portuguese to CFD trading is leverage. Most brokers who support this venture allow their clients to start trading with low capital and then use leverage to increase potential gains. If you can’t afford substantial investments, this strategy should be your go-to, at least for now.

4 - Crypto arbitrage

Portugal is undoubtedly a haven for crypto enthusiasts. That is because this country has friendly laws and regulations, which have attracted many brokers and exchanges. Plus, authorities recognize crypto as a valid form of payment, although it has yet to classify it as legal tender. Not to forget, residents have access to thousands of cryptocurrencies, including popular options like BTC and ETH.

If you are interested in cryptocurrencies, consider venturing into crypto arbitrage. With this strategy, you can exploit and profit from differing crypto prices across multiple platforms. That is possible because exchanges often have varying prices for the same crypto assets.

5 - Momentum trading

As the name suggests, momentum trading requires you to buy/sell assets in accordance with the current momentum. In other words, as a momentum trader, you buy assets whose prices are rising and sell those experiencing the opposite.

The good thing about momentum trading is that it allows you to keep positions open for days or even weeks while riding the wave. That makes it ideal for both short and medium-term trading. This strategy can play quite well in forex and CFD trading.

Practical Tips for Portuguese Investors

Investing can be your key to success, or it can bring your whole world tumbling down. It all depends on how you approach this venture and the decisions you make. With that in mind, the following practical tips will tilt the odds in your favor:

  • Choose the right broker

As an investor, you should interact exclusively with credible brokers. You can ascertain a broker’s credibility through licensing and regulation. The best service provider to invest with should be licensed or regulated by the CMVM. It should also have stellar ratings and reviews on the App Store, Trustpilot, and Google Play.

  • Diversify

Invest in one financial asset is setting yourself for a perfect storm. If you do that and the asset’s performance isn’t in tandem with your predictions, you will lose money. That is why you should always put your money in different assets from the same class or different categories. Optimum diversification also requires you to invest in instruments from diverse corners of the globe, not just Portugal.

  • Stay informed

Savvy, successful investors treasure information. You should do the same and strive to always stay on top of crucial financial and economic news. Additionally, set aside enough time to learn and expand your knowledge base. Financial markets change constantly; if you don’t value continuous learning, you will lose touch and get left behind.

Common Mistakes to Avoid

Many investors and traders in Portugal have failed because they made certain mistakes that can cause significant losses. This is especially true for beginners who have yet to become familiar with this industry’s intricacies.

Having said that, here are a few mistakes that have heralded the downfall of many investors; avoid them at all costs:

  • Ignoring risk management: Many investors have had their capital wiped out prematurely because they didn’t mitigate risk exposure. Don’t make the same mistake. Diversify, use tools like stop-loss orders, and never risk too much in one go.

  • Using too much leverage: The problem with margin trading is the allure of big returns can encourage overleveraging. If you’re new to trading, use the lowest leverage possible before you know how to handle yourself and make the right decisions.

  • Relying on shoddy brokers: Choose your brokers wisely. Otherwise, you will always face issues like high fees, delayed deposits, and manipulated prices. Never invest with a provider that isn’t licensed by reputable authorities.

  • Letting emotions take the lead: Trading and investing requires a calm persona. If you let emotions like fear and greed get the best of you, you will lose your hard-earned money within no time.

Bottom Line

Despite its lucrative nature, investing is a fickle business. Do yourself a favor and research the risks behind it before proceeding. Most importantly, find the best hacks for navigating and dodging said risks.

Don’t forget to find the best strategy for your investment needs as early as possible. You can stick to your strategy forever, provided it works. However, if you find it wanting, feel free to make adjustments or adopt a new strategy altogether.