Because of the large number of trades and short holding times, guerrilla trading is close to scalping and high-frequency trading. A guerrilla trader’s ultimate aim is to make many trades, keep them for a few seconds to minutes, and then leave with a small profit.

Bond traders are the best example of this form of trading since they typically trade in ticks with a profit goal of 3-6 ticks. Despite the high cost of their transactions, bond traders often have very stringent risk management strategies. Given their slim profit margins, such traders are obsessed with minimizing their losses. The guerrilla trader’s account will need to recover from a large loss over many trades.

First Example 

EUR/USD currency pair is the most liquid pair, with a maximum daily loss cap of $500 is an excellent example of a guerrilla trading strategy. As a result, if the trader risks $10 per trade and makes about 25 trades a day, their maximum loss would be $250, or half of their daily cap.

The trader’s chances of becoming successful at the end of the month are reasonably good if the trading strategy has a win rate that is more than 50% and a risk-to-reward ratio of 1:2. This trading approach’s key benefit is that, unlike discretionary schemes, the trader still has a fixed risk sum for each deal.

Guerilla Trade Characteristics

Scalpers are much slower than guerrilla traders. A guerrilla trader’s typical trade lasts just a few minutes. This is because the longer a trade is kept, the greater its chance of going against the trader. There are over 20 trades per session, which is a high number of trades. When conditions are favorable for frenzied trading, successful guerilla traders can execute more than 20 to 25 trades in a single trading session.

Returns are decent 

A guerrilla trader is happy to make 10 to 20 pips on a forex trade, while a scalper can aim for more than twice that number or 25 to 50 pips.

Spreads are tight, and commissions are low 

Low commissions and tight trading spreads are important for high trading volume and low guerrilla trading returns.

Small setbacks 

A guerrilla trader cannot afford to gamble more than a few pips on a single transaction due to the low returns, with maximum losses capped at 5 to 10 pips.

Forex Guerilla Trading

Guerrilla trading in the Forex markets works best on major currency pairs with low spreads and high liquidity. On Forex trades, guerrilla traders usually aim to gain 10-20 pips while losing less than 5 to 10 pips per deal. They normally exchange high-volatility pairs and keep their positions for seconds to minutes.

As a guerrilla trader in the Forex markets, your goal is to make fast trades and gain small profits. Since you trade based on price fluctuations inside tick charts and 1-second to 1-minute charts, the methods vary slightly from those of a scalper. You also sell for shorter periods than a scalper.

Trading strategy for Guerilla on the stock market

Of course, this quick-fire approach isn’t limited to the Forex market. You may use this strategy to trade the stock market as well.

Guerrilla stock trading entails taking heavily leveraged stock trades and retaining them for a limited period to benefit from them. When you use guerrilla trading tactics to exchange stocks, your trades would be much quicker than scalpers’ since you are only trying to make a small profit.

Final Advice 

Are you still unsure of how to succeed with this approach or whether this type of trading is right for you? Here are some crucial guerrilla trading tips:

Keep a close eye on the economy and keep a close eye on the assets you exchange.

You must limit yourself to trading instruments with high liquidity.

Major currency pairs and well-known stocks, such as those in the FAANG grouping, are extremely liquid.

To cut prices, exchange instruments with low spreads and commissions.

Big spreads should be avoided because they can eat into your earnings.

To make good money, make a large number of trades (20-25 per day).

Good luck!