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