Unlike gambling, where the outcome of a game is decided by chance, traders use specific strategies to predict market direction. These can be based on technical analysis (interpreting charts and patterns as price forecasts) or fundamental analysis (understanding the underlying drivers of the market such as earnings, geopolitical events and macroeconomic shifts). This link :theinvestorscentre.co.uk

This strategy aims to ride the momentum of established market trends by targeting strategic entry points during temporary retractions in prices – known as pullbacks. This can boost trade profitability, while reducing risk and potentially enhancing the potential for higher rewards. In this context, trend-following is a popular strategy for day trading in the UK, and can be deployed across a range of assets including UK stocks and FTSE 100 indexes, commodities and currency pairs involving GBP.

Best Trading Techniques UK: Proven Methods for 2025

The earnings play revolves around anticipating how the market will react to a company’s financial results, which are published at regular intervals, typically quarterly. Whether a company beats, meets, or misses analysts’ expectations can dramatically impact stock price movement, so traders position themselves favourably before earnings announcements to capitalize on the subsequent market reaction.

Reversal trading is the flipside of trend trading, targeting opportunities at the endpoints of existing trends and attempting to anticipate shifts in market sentiment. It is a relatively more complex strategy, which can be employed in a wide range of markets, from UK stocks and FTSE indices to commodities and currency pairs involving GBP.