Equities Trading Strategies

Equities trading strategies


The world’s stock markets see billions traded each and every day. It’s a fast-paced, gripping form of investment, and traders may be able to benefit from taking a look at the following strategies:

  • 01

    The Importance of a Quick Response

    Stock markets can be highly volatile, with huge price swings sometimes occurring very quickly. Therefore, traders need to be able to react swiftly; sometimes the difference between profit and loss can be a matter of seconds.

    It was used to be the case that online trading platforms were only accessible when traders were at their computer, but the development of mobile trading apps has enabled traders to react to financial events as soon as they hear about them, no matter where they are. At ETX Capital you’ll have access to a range of mobile apps for Apple and Android devices, featuring trading hotlists as well as trade-through charts, which can help you to make trades quickly in an environment where every second can count.

  • 02

    Sticking to Your Limits

    Spread betting does not involve traders buying and selling the product itself, but rather trading on the movement of the product. The more the stock moves in the direction that the trader has predicted when taking their position, the more profit they will reap. Of course, the reverse is also true; if the stock moves in the opposite direction than was expected by the trader, the greater the losses that will be incurred.

    The most basic trading strategy - buy low, sell high - sounds simple enough, but in reality things tend to prove more difficult. How do you know when a stock is really at a ‘low’, or has reached its ‘high’?

    Trading patterns can highlight the generally optimistic nature that many people possess, with a surprising amount of traders sticking with a trade well beyond an advisable point, as they cling on to the hope that a negative position will somehow turn itself around.

    Before making a trade it is recommended that the trader fixes a point at which they will extricate themselves should things not go their way. However even if you begin a trade with this intention, it can be tempting to shift the goal posts mid-trade if things aren’t going well, but you should stick with your initial decision. You can hang on in the hope that the stock value will shift direction, but there is no guarantee that such a policy won’t prove a costly mistake. It’s far better to accept a small loss and move on, rather than to lose all of your money.

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