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What are different trading methods available for Futures trading?

Mudrex currently provides 3 different trading methods for your Algo strategies present in the testing console. The trading methods available are: 

  • Long Only
  • Short Only 
  • Long-Short

Long Only

Strategy buys long contracts when BUY event is triggered and sells the contracts when SELL event is triggered.

Buy -> Opening a Long position 
Sell -> Closing Position
  • You can use margin and leverage for trade
  • You don't physically own any asset
  • You can lose all your money(Liquidate) if the trade goes wrong and the collateral amount for the trade is over(only in the case of using leverages, for 1x it works exactly the same). 

Short Only 

This works exactly opposite to Long Only strategy.

The position opens when the SELL event occurs. Strategy buys Short contracts on 'Sell' event and sells the contract on 'Buy' event. 

Buy -> Closing the position
Sell -> Opening a Short position
Shorting also known as short selling involves the sale of stock that the seller does not own, or shares that the seller has taken on loan from an exchange. To short a stock is for an investor to hope the stock price goes down. There are a few differences in shorting a trade from normal trading and can only be done on the platform which offers margin trading. 
  • Can be only traded with the margin amount
  • Investors don't own any asset on short trading 
  • There are chances of liquidity and losing the asset

Long-Short

This is a combination of the Long-only and Short only methods. Here, the position can be opened with either a 'Buy' or 'Sell' event. When a position is open and the opposite signal occurs, the strategy automatically takes the corresponding opposite position.

 

Buy -> Opening a Long position
Sell -> Opening a Short position

For example: Let's say a strategy triggers a buy of 1000 'Long' contracts because of a 'Buy' Signal. After a certain time if a 'Sell' signal comes into play. In this scenario, first, the 1000 'Long' contracts are sold and then 1000 'Short' contracts are bought

The position is closed only when the strategy is stopped or a Stoploss/Take Profit is triggered. 

Users can leverage Long- Short methods along with path actions to create complex strategies.

Users can now make leverage trading based strategies to take advantage of both upswing and downswings in the market on Mudrex.

For more information, feel free to reach out to us at help@Mudrex.com

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