Trading FAQs

Day trading is taking positions or trades with the intention of closing them before the end of the day. Swing trading is taking trades with the intention of holding them for several days to several weeks. We are often asked which is the best way to trade. The answer is whichever suits you! Previous trading experience isn’t the issue here. Successful day traders require more time at the screen (an hour or more at a minimum), more patience and a greater control of emotions. Brand new traders can be successful day traders as long as the desire is there but we generally recommend our swing trading courses to beginner traders and a good starting point for Trendsignal’s way of trading.  

Day traders aim to take advantage from price movement taking place during the day, whilst at their screens. This allows more trading opportunities, typically with tighter stop loss distances and the potential for increased trade size. The rewards can therefore be significantly higher than from swing trading or investing, making day trading attractive for full-time traders. Day traders might only hold positions for a few minutes to a few hours, usually focusing on markets with tighter spreads and lower dealing costs. The Dynamic Trader course concentrates on the most active day trading markets including the Dax (GER40), Dow (US30) and Nasdaq (NAS100) indices, along with gold, oil and active Forex pairs.  

Swing traders are generally pursuing a second income or capital growth. The amount of time required varies depending on the strategy used and the level of analysis required. Trendsignal’s Swing Trading strategies, for example, are simplified (at the point of use) and can be used from only 20-minutes application per day, making them the perfect swing trading strategy for anyone, even those with busy lives. The longer the trade duration, typically the bigger the moves you are looking for, which makes trading costs less of a factor than for day trading. This gives greater flexibility over which markets to trade, such as Forex, stocks & shares and the more liquid cryptocurrencies.   Day trading and swing trading are both suitable for CFD and spread betting accounts.  

Learn more: View our day trading and swing trading courses.

Scalping is a term used to describe very short-term day trading. Day trading describes opportunities closed on the same day but scalping is more about holding positions for a few seconds to a few minutes, usually only looking to make a few pips or points. Scalpers would usually use very short timeframe charts, such as the 1 minute chart, and look for very short term moves to make a profit, often monitoring trades very closely, requiring a lot more focus than Swing trading. That’s not to say Swing Trading is casual. Far from it. Following your trading rules and trading plan is critical for any trading style. The different being that due to its short-term nature, Scalpers are unlikely to be able to juggle other tasks whilst trading. Swing traders however tend to trade around and alongside their day-to-day commitments, and have plenty of time to make their decision, making it a great option if looking for a second income from trading. 

Learn more: View our day trading and swing trading courses.

Position traders tend to be interested in taking a longer term “position” in a market, preferring to ignore the short-term swing that can take place. This usually means that position traders hold trades for months or years, making it more appropriate for fundamental analysis and longer-term trends. This form of trading is more closely linked to buy-and-hold investing with the major difference being that position traders can take “Short” positions (speculating on falling prices) too. Swing traders tend to sit in the middle between day traders and position traders – holding their trades for a few days or weeks, usually having a preference for technical analysis and charts.

Learn more: View our swing trading courses.

The answer to this is based on three things:  

1.     How good is your strategy and are you following it?
2.     How good if your risk management?
3.     How secure is your broker?

Regardless of your answers to the above questions, there is always risks with trading and investing, and no-one has a crystal ball. It is important therefore that you are comfortable with the capital you are risking.

A large percentage of traders lose money from trading and much of that is down to not having a strategy, having a bad one, or having a good one and not implementing it correctly. With the right strategy and implementation and a sensible attitude to risk, your chance of being successful is greatly improved. But security of funds is an often overlooked factor. Trading with a regulated broker, with stringent client money rules is essential. It is important you do your research before you deposit funds with your broker, which is why all our new members are provided with a complimentary call with an independent and regulated trading account specialist team.

Learn more: Learn a trading strategy at our free Forex workshop. 

The most profitable type of trading is the one that best suits you. That means lifestyle, when you can trade, how much time you have to trade etc. Because there are lots of trading opportunities throughout the day, day trading is potentially the most profitable type of trading, but that doesn’t mean it is the type of trading that you are most likely to be profitable doing.  

The longer the trade duration and bigger the target, usually means the wider the stop loss. And since trade size and risk should be based on stop loss distance, that basically means, the longer the trade duration, the smaller the trade size. This is important because 10 pips to a day trader can be worth a lot more than 10 pips to a swing trader. Spread betting £1 per point for a swing trader would make £10 in this example, but £10 per point to a day trader, would be worth £100. 10x the money despite being the same number of winning pips. Pips made isn’t the right measure of profitability.  

Let’s say you risk 1% of your account on each trade, which is sensible, and you are also looking for a 1% target. It basically means the more trades you take, the more times you can make that 1%. So, a good strategy that trades once per day will produce 20 trades per month. If all hit your target (which is unlikely but…), that’s a maximum profit of 20% for the month. If you do the same thing for 100 trades per month, there is the opportunity for up to 100% profit. Yes, there will of course be loss making trades, but you get the idea. The more trades you take, the more you can potentially make. The caveat to that is, you MUST have a good trading strategy or you are in danger of losing a lot too. And don’t forget, it doesn’t matter how good any strategy is, if you aren’t following the rules properly, your results can be wildly different. That’s why it is so important, regardless of opportunity, that you choose a trading style and strategy that suits you and that you CAN follow.  

You can book a call with one of our experienced team to find out more about trading styles and which one suits. You can also read more about swing trading and day trading here.  

Learn more: Book a call with one of our traders to find out which trading style best suits you. 

Forex signals are much the same as trading signals above (check the “What are trading signals FAQ”.), but specifically focusing on trading the forex markets. Forex signal providers should provide their subscribers with a full track record and information on their strategy to help confidence.  

Forex signals should provide you with the instrument name, direction, recommended entry price and stop loss and targets. Ideally, it should also be accompanied by the reasons for the trade.  

 Following forex signals, without an understanding of the markets is usually fraught with risk, and we think it far better to learn to be in control of your own trading. The good news with Trendsignal is that we do that alongside our rules based and colour-coded strategies, allowing you to pick trades with ease and confidence.

Learn more: Learn a trading strategy at our free Forex workshop. 

When new to something, we are all likely to make a few mistakes. We generally recommend that beginner traders start on a demo account to learn how trading platforms work and how to buy and sell accurately. However, when it comes to trading strategy, a demo account will only take you so far. Yes, of course a demo account has a place, especially when testing and refining the rules of your trading plan but there is no substitute to trading on a live account. Traders act differently when real money is on the line. With little/no emotional attachment to the trade, a demo account is seldom an accurate reflection of how you would have traded on a live account with fear and greed in greater control. That’s why Trendsignal with several regulated brokers that offer CFD and spread betting trading from just 10p per point, meaning our members can learn to trade by risking very small and manageable amounts of money on each opportunity. Even risking a few pounds on a trade can make a difference, and suddenly make the outcomes much more realistic compared with a demo account.    

When trading, it is important to trade with money you can afford to lose, and only increase account deposits and trade size in line with confidence. Relaxed money wins, it a popular trading motto. Costs of trading courses aside, even if you have a lot more capital available, we generally recommend starting with £1000 - £2000 on an account, and work on proving to yourself that you can do this first. That is plenty of money for initial margin, particularly if trading with a broker offering low and flexible stake sizes. Get it right first…. you can always ad to your account later.  

Learn more: Watch our free trading workshop.

Well, actually most traders lose money. If you look at FCA regulated brokers’ websites, you will typically see a risk notice at the top showing what percentage of their customers lost money over the previous quarter – usually around the 70% mark. Why is this? Usually down to a gambling attitude, or not having a clear and definable strategy. That is of course something that we can assist you with.  

But is that any different to running a business? A reported 90% of businesses fail within 5 years. No plan, no experience, no research can all contribute to the failure rate. And trading is the same.  

The good news is, when you have the right strategy, and the discipline to follow it, the potential gains can be significant. How much you can make depends on attitude to risk, trading style and account size. One thing is true however, that given the scale of the forex, stock and crypto markets, online trading probably has greater profit potential and lower barriers to entry than anything else. It just needs to be done the right way.  

Learn more: Review our testimonials to see our members’ success stories.

Learning to trade on your own can take a long time and many never become profitable. However, learning to trade with Trendsignal fast-tracks that process. Trendsignal’s trading courses provides simple to use and clear trading strategies, alongside live trading education and coaching, all designed to help you achieve your trading goals. Given the nature of the trading strategies we teach, many new Trendsignal members are making profitable trading decisions within a few days. 

Learning to swing trade yourself takes time, and few are successful. That’s why Trendsignal fast-tracks the process for Swing traders to trade the forex, stock and cryptocurrency markets with confidence. Trendsignal’s swing trading courses provides colour-coded trading strategies, alongside market scanners, live trading workshops and personal coaching, all designed to help home traders trade with confidence. The simple-to-follow trading strategies allow disciplined traders to make profitable trading decisions within a few days, giving them a platform from which they can develop.  

Learn more: Watch our free trading workshop.