What is Short-Term Trading and What are the Best Strategies? – IG

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Forex

Perhaps the most popular short-term trading market is forex, due to the sheer number of currency pairs that are available to trade 24 hours a day, five days a week.

The market is famous for its high volatility, which provides short-term traders with plenty of opportunities for going long and short on forex pairs. The market is also known for its deep liquidity, which makes it easy to enter and exit positions quickly.

Learn more about forex trading

When trading forex using a short-term strategy, if you hold positions open longer than a day, you would incur a rollover fee for doing so.

Find out about forex overnight funding

Although most providers only offer forex markets 24/5, with IG Bank you can trade GBP/USD on weekends too.

Learn more about weekend trading

Shares

There are thousands of shares available to trade across stock markets all over the world. It is the huge variety that makes share trading so popular with both long-term and short-term traders.

Learn how to trade stocks

Although stock markets do have specific trading hours – meaning there will be less volatility out of hours – they are still a favourite for those looking to trade short term. You’d either employ a day trading strategy and close trades out at the end of each day or hold positions over a few days.

It is also worth bearing in mind that some brokers do offer out-of-hours trading on shares. For example, with IG Bank you can trade 70 key US stocks outside of market hours to make the most of company announcements.

Find out more about our extended hours on US stocks

You can take a position on shares speculating on the future market price via CFDs. However, trading is more suited for use over the short term, as it opens up the prospect of going both long and short on the price of shares.

Learn how to short-sell stocks

Indices

Short-term trading indices would fall into a similar pattern as share trading, as there are still restrictions of market hours. So, you would either look to follow a day trading style to focus on intraday movements or maintain a position over a few days to a week.

When you trade indices, you’d be speculating on a number of different companies shares rather than an individual stock. This means that you gain a much larger market exposure, but that you’ll also need to be aware of a lot more factors that could impact your position.

Learn more about indices trading

It’s worth noting, that like our out-of-hours forex and shares markets, we also offer certain weekend indices markets.

Learn more about weekend trading

Cryptocurrencies

The cryptocurrency market is open 24 hours a day, seven days a week,1 which provides plenty of opportunity for short-term traders. The volatility of cryptocurrencies, such as bitcoin, also creates a lot of interesting market movements that short-term traders can seek to take advantage of.

As with any market, it is important to have a suitable risk-management strategy in place before starting to trade – but as the cryptocurrency market is still comparatively new, it’s even more vital to have a thorough knowledge of the asset and how to trade it.

Learn how to trade cryptocurrencies

Commodities

Trading commodities enables you to take a shorter-term view on a range of assets such as oil, gold, silver, wheat and sugar.

With IG Bank, there are no fixed expiries on our commodity products, which means that short-term traders can define their own parameters – trading over whichever timeframe they deem necessary. Trading commodities works in broadly the same way as indices trading, in that you’ll pay a funding charge for holding positions overnight.

Learn more about commodity trading with IG Bank

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