Trading approaches: what each one requires, and where it fails.

10 approaches, one guide each. Every guide sets out what the approach is, what it requires in time at the screen, capital and execution, how it is usually implemented, a worked example that shows the costs on both a favourable and an adverse outcome, and the market conditions and behavioural errors that have historically caused it to fail. None of the guides recommends an approach or describes any rule as profitable; each closes with who the approach does and does not suit.

A long run of candlesticks rising and then falling, with a smooth trailing line following beneath and then above them

01 · 6 minute read

Trend Following: What It Is, What It Requires and Where It Fails

Holding exposure in the direction of a sustained move and reducing it when the direction changes. Depends on persistence outlasting the delayed entry.

A jagged price line swinging above and below a gently curving centre line and returning to it each time

02 · 6 minute read

Mean Reversion: What It Is, What It Requires and Where It Fails

Trading a deviation from a defined reference on the expectation that it narrows. Depends on the reference remaining valid.

Candlesticks in a quiet range beneath a stepped boundary line, then rising sharply once the boundary is crossed

03 · 6 minute read

Breakout Trading: What It Is, What It Requires and Where It Fails

Entering when price moves beyond a defined range or boundary. Depends on the move after the boundary outweighing false breaks.

A price series swinging between successive highs and lows, each turning point marked with a short dashed level

04 · 6 minute read

Swing Trading: What It Is, What It Requires and Where It Fails

Holding for an intermediate move of several days to weeks. Carries overnight exposure and financing.

A single session of candlesticks rising and falling around a smooth reference curve

05 · 6 minute read

Day Trading: What It Is, What It Requires and Where It Fails

Opening and closing within one session. Concentrates dealing costs and decision frequency into short intervals.

Small, rapid price movements oscillating tightly around a horizontal intraday reference line

06 · 6 minute read

Scalping: What It Is, What It Requires and Where It Fails

Very short holding periods for very small movements. The most sensitive approach to spread, commission and execution delay.

Two price paths with a differential line running between them, all rising and falling together

07 · 5 minute read

Carry Trading: What It Is, What It Requires and Where It Fails

Holding a higher-yielding exposure against a lower-yielding one. Accrues a differential while remaining exposed to abrupt price moves.

A price line moving quietly, then jumping sharply at a single marked point before settling at a new level

08 · 6 minute read

News and Event Trading: What It Is, What It Requires and Where It Fails

Taking exposure around scheduled or unscheduled information. Exposed to gaps, wider spreads and uncertain interpretation.

Two price lines that track each other closely, with a brief shaded gap between them that closes again

09 · 6 minute read

Arbitrage and Latency Strategies: What They Are, What They Require and Where They Fail

Capturing price differences between equivalent exposures. Requires simultaneous executable access that a retail CFD account does not provide.

A falling price line crossing a series of evenly spaced horizontal grid levels, a position opening at each

10 · 6 minute read

Grid and Martingale Systems: What They Are, What They Require and Where They Fail

Orders at fixed intervals, often with increasing size after losses. Converts repeated small gains into a large loss in a one-way move.

The indicators these approaches use

Moving averages, channels, ATR and the other tools referred to in these guides each have a guide of their own: what it measures, the formula with a worked example, and its known limitations.

Indicator guides

Educational content. Nothing on this page is investment advice or a recommendation to adopt any approach. Trading leveraged products involves significant risk of loss.