Trading strategies every trader should know
Trading strategies every trader should know
When trading in financial markets, you will encounter several popular trading strategies. You may also find that your success using one strategy will not mirror someone else’s success.
Ultimately, it’s up to you to decide which is the best trading strategy for you. Some important factors to consider include your personality type, lifestyle and available resources. In this article, we run through some of the most common trading strategies that could inspire you to build your own trading plan, test new trading techniques or even improve upon your existing trading strategy. Learn how to start trading on our Next Generation trading platform.
- News trading strategy
A news trading strategy involves trading based on news and market expectations, both before and following news releases. Trading on news announcements can require a skilled mind-set as news can travel very quickly on digital media. Traders will need to assess the news immediately after it’s released and make a quick judgement on how to trade it. Some key considerations include:
Is the news already fully factored into the price of an instrument or only partially priced in?Does the news match market expectations?
Understanding these differences in market expectations is crucial to success when using a news trading strategy.

News trading strategy tips
Treat each market and news release as an individual entity.Develop trading strategies for specific news releases.Market expectations and market reactions can be even more important than news releases.
When trading based on news releases, it’s vital that the trader is aware of how financial markets operate. Markets need energy to move and this comes from information flow such as news releases. Therefore, it’s common that news is already factored into the assets price. This results from traders attempting to predict the results of future news announcements and in turn, the market’s response. A news trading strategy is particularly useful for volatile markets, including when trading oil and other fluctuating commodities.
‘It's better to travel than to arrive’
The above is a common trading motto. This motto suggests that it can be better to trade on price action before an announcement rather than simply waiting for the announcement. Doing so may protect the trader from the volatility than can follow a rumoured announcement. Learn about utilising a 'buy the rumour, sell the news' trading strategy.
Benefits of news trading
A defined entry and exit strategy. Entering and exiting a trade is based on how the market interprets the news, which is commonly outlined in a trader’s plan.Many trade opportunities. Every day, there are several news events and economic releases that can provide trading opportunities. You can follow crucial news announcements by monitoring our economic calendar.
Drawbacks of news trading
Overnight risk. Depending on the type of news, trading positions may be open over several days. Any positions that are left open overnight incur overnight risk.News trading requires expert skills. News traders need to understand how certain announcements will affect their positions and the wider financial market. Additionally, they need to be able to understand news from a market perspective and not only subjectively.
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- End-of-day trading strategy
The end-of-day trading strategy involves trading near the close of markets. End-of-day traders become active when it becomes clear that the price is going to ‘settle’ or close.
This strategy requires the studying of price action in comparison to the previous day’s price movements. End-of-day traders can then speculate how the price could move based on the price action and decide on any indicators that they are using in their system. Traders should create a set of risk management orders including a limit order, a stop-loss order and a take-profit order to reduce any overnight risk.
This style of trading requires less time commitment than other trading strategies. This is because there is only a need to study charts at their opening and closing times.