Spread Betting & CFD Trading
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A robust trading strategy is the cornerstone of successful trading. That’s why we’ve compiled this guide to help you understand different approaches to trading and build a solid strategy of your own – one that suits your personality, goals and risk appetite. You’ll also learn how to test and refine your trading strategy to adapt to changing market conditions.
A trading strategy is a plan or set of rules that a trader follows when buying or selling financial products. Your strategy is there to help you make well-informed trading decisions calmly and dispassionately, drawing on financial data, technical indicators and your research skills, rather than being guided by gut instinct or emotions.
A good trading strategy takes various factors into account, including:
Market conditions
Risks, and your risk appetite
Your personal trading goals
Here we look at some of the main trading strategies, most of which involve short-term timeframes. Traders often adapt one or more of these approaches to suit their needs and circumstances, developing them into a personalised plan or trading style.
The strategies outlined below carry risks as markets can quickly change direction, leading to potential losses. To help manage these risks, traders often add take-profit and stop-loss orders to their trades.
Trading strategies are highly subjective. You may not hit upon the ideal strategy right away, so it’s worth experimenting with different approaches until you find a strategy – or a blend of strategies – that’s right for you.
It's important to remember that the best traders are adaptable and can modify their trading strategy to suit the market conditions and the available opportunities. Therefore, it’s a good idea to learn about various trading strategies and to try combining them in different ways.
When developing your trading strategy, keep the following points in mind:
All traders make losing trades, so don’t become disheartened if you incur losses. Start small, and don’t put up more than you can afford to lose.
Patience is vital. Open a demo account with us and take the time to learn how to apply different trading strategies.
Formulate a trading plan and keep track of your profits and losses. Doing so will help you maintain consistency and discipline in your trading.