FEATURE: What are best trading strategies for the small business

Growing a business is a complex but extremely rewarding effort, and one which requires a great deal of knowledge and experience as well as a stellar team to back up your vision.

But sometimes, market conditions can make it especially hard to thrive as your business should.

This is certainly true of the present moment, as rising wholesale and energy costs threaten the bottom line of small businesses across the country.

The rise in prices is also precipitating a considerable fall in the value of UK currency, devaluing cash holdings across the board.

While cash is undoubtedly king in times of economic hardship, it is only diverse and shrewd investment that can ensure a business’ coffers remain safe and valuable.

To that end, trading and investment can form a lucrative form of secondary income, and a necessary approach to beating inflation.`

While many businesses entrust their wealth to third-party advisors and brokers, there is an argument for taking personal control of your investment strategy – but what are the best strategies to employ for building your business’ portfolio?

Swing Trading
Swing trading is investment in its simplest and most common state.

Investors purchase shares on the stock market with the intention of holding them for extended periods of time; investment in growing companies will yield solid returns as the stock’s performance improves on the market.

A diverse portfolio of promising businesses and steady performers spreads risk, and ensures regulated growth.

Commodities Trading
Commodities refer to physical resources, as opposed to shares of a business.

Raw materials such as ores and metals, as well as agricultural produce and petrochemical resources, make up the commodities market and represent another way to grow wealth.

Investment in commodities can be prohibitively expensive at the outset, though, minimising potential profits made through market movements.

For smaller businesses, the better option may lie in CFD trading– wherein the investor participates in market movements on margin without directly purchasing any assets or holdings.

Day Trading
Day trading is a more involved form of investment, where an investor buys and sells stocks and shares throughout a single trading session to take advantage of the rises and falls in the market in real-time.

This can be a more risk-laden form of investment, but also with more immediate returns.

Day-trading is typically a full-time undertaking, and would require attention away from your business’ day-to-day operations.

Scalping
Scalping is a strategy that operates on volume, and that can be particularly useful when it comes to benefitting from smaller market movements – in particular, the movement in currency prices on the foreign exchange market.

Scalping sees a business make small profits from large trade volumes, ensuring value is retained and profits act as ‘interest’ on savings.

(Image source Pixabay)