Sometimes, even in day trading, we want to play the long game. We want to keep our money moving around the markets, and/or we invest in something planning to hold onto it for a while. But sometimes, we want to come in like a wrecking ball (without the naked Miley Cyrus), execute some fast, low-risk, potentially lower-profit trades, and then disappear back into the night with our winnings.
This is what’s known as “guerilla trading,” and the point is to make little chunks of change hither and thither without exposing ourselves to too much risk.
And when we say “fast,” we mean fast. We’re talking multiple transactions in the span of a few minutes. Guerilla traders don’t mess around. They keep their eyes glued to the market they’re in (the forex market—they do foreign currency trades—is good for this type of thing) and are ready to pounce at a second’s notice if it looks like their mini-trades are going to tank…or soar.
Which brings us to our next point: guerilla trading is only low-risk if we keep our eye on the ball and stick to trading in markets with tight spreads, low trade fees, and high liquidity. (Again, we mention the forex market.) We need to be able to recognize the signs that a flurry of trade activity is coming, which means we also need to have a deep and spiritual understanding of the trades we’re looking at. This is not something amateur investors should take on, at least not without the help of brokers or other guerilla trading pros.