Trading strategies

Your approach to financial markets fundamentally affects the way you trade. It determines your choice of strategies, methods for managing risk, and other key factors.

In this course, we will explore how to select trading strategies and risk management approaches that best suit your trading style. However, before diving into the details, it is essential to clearly define your trading strategy.

Which Trading Strategy Should You Choose?

• Types of Trades

• Key Differences at a Glance

Which Trading Strategy Should You Choose?

Every trader has their own unique style, which depends on their goals and the time they are willing to dedicate to trading. A critical factor in selecting a strategy is how frequently you want to trade and how long you plan to keep your positions open.

Long-term traders open only a few positions per quarter, hold them for several months, and aim for profits of 10% or more.

Day traders, on the other hand, open multiple positions daily, hold them for a few minutes to hours, and seek to profit from smaller market movements using leverage.

Short-term and medium-term traders fall somewhere between these two approaches. They often use a combination of different strategies that align with their trading objectives.

Comparison of trading strategies:

Types of trades

Your trading style also influences the types of trades you will use. Traditional investing often involves long-term asset holding with the goal of generating profits. For leveraged products like CFDs, various types of trades are available to match different strategies.

Daily CFDs:

• Short-term trades: Positions can be held for a few days or weeks.

• Lower spreads: Tighter spreads compared to forwards.

• Overnight financing: A fee is charged if positions remain open after the market closes.

• No expiration: Daily CFDs do not have a set expiration date.

Forwards:

• Longer-term trades: Suitable for holding positions for several weeks to months.

• Wider spreads: Financing costs are already included in the spread.

• No overnight fees: No additional costs are incurred for overnight financing.