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Shares Trading Strategies

Read more about what shares trading is, how to trade shares and discover a range of tips and strategies.

Trading on shares is not like investing – you have the ability to long or short on a stock, creating new opportunities. But as leveraged trading products, equity CFDs and shares spread betting carry risks as well. It’s possible for losses to exceed your deposited funds – something that is not possible when purchasing stock outright.

To get a better handle on trading shares, there are a number of tips and strategies to consider.

Shares Trading - Quick Responses

01Shares Trading - Quick Responses

In an environment where stock prices can move extremely quickly, traders need to be able to move as quickly as possible. A rapid response can be crucial; sometimes a few seconds can make the difference between profit and loss.

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Mobile trading apps enable traders to respond to financial news as soon as they hear about it, rather than having to wait until they reach a desktop to do so. ETX Capital offers mobile trading apps for both iOS and Android products, as well as trade-through charts and the ability to create trading hotlists, both of which can also help ETX Capital clients to execute trades with maximum rapidity.

Trading Strategies Courses

0​​2Trading Strategies Courses

To learn more about shares trading strategies, you can sign up to our regular trading seminars or webinars, all of which are free to ETX Capital clients.

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Know your Limits and Stick to them

0​3Know your Limits and Stick to them

Throwaway comments like ‘buy low, sell high’, though technically accurate, are often extremely unhelpful; firstly because they state the obvious and secondly because it’s not always so easy to tell when entering into a trade whether a stock is truly at a ‘low’ or ‘high’.

Trading often shows us human natural optimism; a surprisingly large number of traders seem to stick with a trade well beyond what might be considered a reasonable point; simply because they believe that the situation will reverse itself.

With Spread Betting one does not trade the product itself, but instead trades the movement of the product. The larger the movement of a stock in favour of a trader’s open position, the greater the profit they will make. On the other hand, the further a stock moves in the opposite direction to a trader’s open position, the more loss they will incur.

Prior to entering a trade, traders need to decide on a point at which, if things are not going well, they will cut their losses and exit the trade – and it’s a good idea to stick to that decision instead of simply changing those parameters if things start to go wrong. While it is certainly possible that at some point the value of the stock in question will start to go the other way, there’s no certainty that this will happen soon enough to prevent traders from using up all of their available funds.

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Shares Trading
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Shares Trading Strategies

Trading on shares is not like investing – you have the ability to long or short on a stock, creating new opportunities.

READ MORE

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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when spread betting or trading CFDs with ETX. You should consider whether you understand how spread bets orCFDs work and whether you can afford to take the high risk of losing your money.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.