Plus500 Trader’s Guide | Popular trading strategies (IL)


Hi, in this video we’re going to take a look at some common trading strategies and the differences between them. Having a trading strategy is important for you as a trader because, when executed correctly, it can help you reach your financial goals. Three of the most popular strategies are: Day Trading, Position Trading and Swing Trading As its name implies, the Day Trading strategy focuses on buying and selling financial instruments on the same day. It’s a form of trading that requires an ability to respond quickly to developments in the market. Typically, Day Traders open a number of smaller trades and will often use stop orders to manage potential losses that can occur. Position trading, on the other hand, is a strategy for longer-term holding periods, such as days, weeks or even months. The objective is to profit from a continuing uptrend or downtrend, almost like riding a wave. Position traders tend to open a smaller number of higher value trades. Swing Trading is a strategy that is implemented in an attempt to capitalise on an expected change of direction in the price of a financial asset. For example, a swing trader may learn from social media about trouble in Apple’s management and predict that the company’s stock will fall. In this case, they would open a “sell” position. Or, alternatively, they may read a news report about positive changes in the global energy market, and assume that the price of oil will increase. In this case, the trader would open a “buy” position. Want to learn more about trading CFDs on Plus500? Check out our website.

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