What is guerilla trading?

[Walter Peters]

[Sheila Olson]

Guerilla trading sounds very exotic, suggesting a nimble, dangerous warrior sneaking in to make a quick and devastating attack before disappearing into the jungle. Actually, that’s a pretty accurate description of a guerilla trader. Guerilla trading is both a mindset and a technique that utilizes ultra-fast, low-risk trades to capture profit and exit just as quickly. A guerilla trader’s trading time frame makes day traders look like buy-and-hold investors. It is even shorter than a scalper’s timeline. Only high-frequency trading systems are quicker than the guerilla trader; a guerilla trader’s time frame rarely lasts longer than a minute or two. Defining characteristics of a guerilla trader:

• Typically makes 20 or 25 trades in a single session; low commissions and tight spreads are essential for this style of trading
• Master of technical analysis, typically operating with tick or one-minute charts
• Low-risk trades, will trade for a 20-pip profit
• Generally avoids periods of extreme volatility when the risk of loss is highest
• Prefers forex market, although will trade in other markets
• Well capitalized with cash he can afford to risk

The key to successful guerilla trading is mitigating risk and limiting the potential for loss in every trade. You must set profit and loss targets for every trade and set automatic stop-losses to remove emotion from your trading decisions. In fact, you must trade with a level of emotional detachment to have any success at all in guerilla trading. Guerilla traders tend to trade the trend rather than betting on a reversal and risk runaway losses. They also avoid averaging down, preferring to cut losses quickly rather than trying to recover a trade gone bad. If you are interested in guerilla trading, start with a highly liquid market such as forex and still to well-known currency pairs. Practice with a simulator or demo account until you get used to the hyper-fast pace of guerilla trades. Develop a trading strategy and plan that focuses on low-risk, low-profit trades and even smaller losses. Be fanatical about mitigating risk with stop-loss protection—and only ever risk capital you can afford to lose, especially in the beginning.

[Patryk baranowski]

You can find more on this topic in the articles below

One minute scalping strategy - https://bit.ly/372yzxF
Scalping trading tutorial - https://bit.ly/3csxYGO

You can also compare forex brokers here - https://bit.ly/3gNqmlx
And read our review of Pepperstone here - https://bit.ly/3dxdQEO

Have you ever tried guerilla trading or scalping? Let us know!

[Philip Miller]

Hi Walter, thanks for asking the question.

Guerilla trading refers to a trading technique where traders attempt to make small profits through multiple transactions. Guerilla trading revolves around the idea to make a number of low profits while minimizing the risk. This strategy is best used in markets with high leverage and tight spreads.

Often mistaken with Forex scalping, which is also a technique known for taking quick positions and making small profits, the timeframe used in guerilla trading is much shorter, usually just a few minutes. 

Minimizing the risk in guerilla trading means that there’s a much smaller chance for incurring losses. With guerilla trading, investors make a high number of trades in every trading session. 

If used correctly, the strategy can become very profitable and that’s why it’s popular among the most experienced traders. Amateur traders are advised to familiarize themselves with the Forex market before turning to guerilla trading.

Hope this answers it.

[Anna Williams]

Hello Walter,

Guerilla trading is a short-term strategy used in trading to bring small profits through a high number of trades, therefore reducing the risk exposure. It’s a strategy that works exceptionally well in the Forex market where there’s high liquidity and the currency pairs have a narrow trading spread. 

The forex market also involves high leverage, and the main idea of guerilla trading here is to cap the losses by staying in the market for a short amount of time.

The technique requires a lot of patience and waiting for the best possible opportunity to make a move. An experienced guerilla trader will take advantage of these opportunities, get in and out of the market quickly to make a small profit, and wait for the next chance.  

It is crucial to apply this strategy only in liquid markets because only a market where you can enter and exit quickly will allow you to maintain a high number of positions.
 

[Jessica Kerry]

Hi Walter,

Guerilla trading is a short trading strategy aimed at swift gains with minimal risks. On average, it only takes several minutes and involves the repetition of minor transactions multiple times in a single trading session. This method is faster than scalp and day trading. Because of the short-term mindset, investors depend on advanced systems for technical analysis. This may include tick charts for identifying market entry and exit spots. Owing to its limited returns and high trading volume, this technique requires low spreads and fees. That makes it ideal for forex trading, particularly currency pairs with high liquidity. Capping profits on unprofitable positions is a necessary skill for guerilla traders, hence, making this method unsuitable for newbies.
 

[Ezio Aurelio]

Hello Walter,

Guerilla trading refers to a trading strategy that requires traders to be quick and efficient in the market, as this type of trading brings quick profits in short trading sessions while keeping the risk low. The sessions in guerilla trading are even shorter than in scalping or day trading.  

The main idea is to make quick and small profits on each trade. To do this, traders must make moves multiple times in a session in order to capitalize. These profits will then account for any short-term trading risks.

Trading durations in guerilla trading are very short, typically just a few minutes, to avoid high risk. Keeping the profit small, between 10-20 pips a trade, helps minimize the risk. In good market circumstances, guerilla traders perform up to 20-25 trades per session.