Online broker strategies - start trading at nextmarkets

Last updated: 23.01.2020
Dominic Hawker
Author:
Dominic Hawker
Adviser
CFD & Trading
Experience
> 30 years

There are many opportunities to enjoy as a trader, but the only way to turn opportunity into a success story is to approach it strategically, with proven tactics and a strong commitment to them. At nextmarkets, we aim to be the best online broker UK by placing the focus on providing our clients with the tools and resources to succeed.

On this page, we outline the importance of broker strategies and go over some of the details that will help you make the most of them. Also, check out our information on the trading tips to broaden your knowledge.

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Broker strategies summarised

Broker trading is the process of purchasing and selling securities on the basis of market movements with the aim of making a profit from those movements on a stock chart. For more information about brokers, look at our What is a Broker? page. Broker strategies are the approaches one takes to this process, and an active shares trading strategy will be different to a long-term, buy-and-hold strategy.

Longer term strategies must employ a mentality that emphasises market movements over the long-term, rather than short-term. Conversely, an active trader believes in focusing on short-term movements and capturing market trends to make profits. There are various approaches to achieving a successful active trading strategy, each appropriate to certain markets and carrying their own risks.

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Trading with an online broker system

In the modern age, virtually anyone is able to own stock thanks to the advent of online brokerage. Just look at our Broker for Beginners page for more information. Online trading has allowed anyone with a little capital, a good financial history and access to a computer to invest in the stock market.

In short, the market is more accessible than ever, but this doesn’t mean online trading should be approached lightly. To be successful and, more importantly, avoid doing significant damage to your finances, you need to understand about different types of broker account UK traders can open.

Working through different brokerage methods

Using a brokerage is the most common – and the easiest – way of buying and selling stocks, bonds and mutual funds. A broker will require you to open an account with them and to deposit funds as a measure of good faith. The popularity of brokerages comes from the fact that they will do much of the behind-the-scenes work on your behalf, leaving you to concentrate on choosing when to buy and sell.

Online brokers are designed to provide their service at a low cost, but this does mean the investor has to do more of the work themselves. This makes it all the more important to follow a healthy broker strategy as you invest. You should also explore what online broker payment options are available to you when planning your strategy.

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Best online broker strategies UK at nextmarkets

There are many great strategies for UK investors to succeed when trading with nextmarkets, your online broker. We have compiled our list of the best day trading strategies that really work, for you to peruse. Otherwise, here are a few of the best online broker strategies UK traders need to know:

  • Look for situations with a big imbalance between supply and demand.
  • Set trading price targets before you start – if you buy a long position, decide beforehand how much profit is sufficient and set a stop-loss figure if the trade doesn’t go your way.
  • Work to a risk-reward ratio of at least 3:1 when you set targets – develop a thorough understanding of risk-reward ratios. You always want to lose small and win big.

Fact Check

nextmarkets is like your own personal CFD and Forex broker, sitting in your pocket, ready to help whenever you need. Joining up gives you access to numerous benefits, including:

  • A demo platform with a balance of 10,000 EUR
  • Low margins with competitive spreads
  • Investment ideas based on your personal trading habits

That’s why we rank highly in broker comparison searches. Try for yourself today.

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Different strategies for different online markets at nextmarkets

There are various types of online trading, and each requires its own tactical approach to succeed. Forex is the most traded market in the world, built around buying one currency while selling another. To succeed, your strategy must allow you to speculate based on factors like geopolitics and economics. Check out our Forex Trading Strategies page.

Another option is to trade CFDs (What is CFD Trading?), whereby you can profit from a stock’s value rising or falling, depending on the accuracy of your prediction for its movements. This requires strategies that minimise risk and set realistic goals, in order to avoid big losses and make a steady profit. For details, see our CFD Trading Strategies page. You will need to develop strategies for whatever type of online trading you choose to do with nextmarkets.

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Realistic expectations from broker strategies

People trying to sell a pro trader lifestyle will depict people enjoying yachts, private jets, presidential suites, fast cars, stacks of cash and mansions. This is the “dream” trader lifestyle. This, however, is all just marketing and doesn’t reflect reality. Professional trading requires a lot of hard work and discipline, developing and sticking to strategies to build up your portfolio and see ever-greater returns.

If you put all this work in to build a portfolio with nextmarkets, you aren’t going to blow it all on a few frivolous luxuries! Those who do achieve that kind of lifestyle build their income with various other pursuits that supplement what they make from their trading.

Sticking to online broker strategies at nextmarkets

To make a success of the online broker strategies you employ, you need to practise patience and discipline when trading with nextmarkets. Many successful day traders actually don’t trade every day – if they don’t see any real opportunities that fit their strategy, they won’t execute any trades that day.

This approach is far better than impatiently going against your better judgement just to keep active. With time practising this discipline, making the right decisions will eventually become second nature. Impulsive behaviour, greed and fear are your worst enemies. Stick to your strategies and you won’t go far wrong. And you can protect your finances by following the hedging strategies to keep yourself in business.

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Adjusting your broker trading strategies

Success on the stock market is about more than simply finding a winning strategy and watching the money roll in. You must constantly adapt your strategy to changes in market conditions, and your trading behaviour will need to change from one trade to the next. If you don’t adapt to the changeable nature of the market, you will never make money from trading.

When market volatility gets high, your stop loss should be set wider to maximise your chances of a big return. This means adjusting your take profit orders too. It is a psychological challenge, but to succeed in trading you need to learn how and when to adjust your broker strategy. Adaptability is particularly important in most of the swing trading strategies, if you choose to take this trading approach at nextmarkets.

Broker strategies: don't follow the herd

Blindly following the herd can lead to either paying over the odds for hot stocks or taking up short positions in securities that are on the verge of an upturn. Trends are an important thing to take note of, but when a trade gets too crowded it may be time to exit. Your strategy should be developed to mean you don’t need to thoughtlessly follow trends – trust in your strategy and stick to the plan. Trends can be played cleverly by following the momentum trading strategies.

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The best online brokerage tactics advice at nextmarkets

The best tactical advice for succeeding with nextmarkets, your online broker, is to pick your battles wisely. You can place a market order or a limit order. Limit orders are a useful tool for holding down transaction fees with thinly traded stocks. But for actively traded stocks, they aren’t really worth your time. Look closely at the data and know how your order size compares with daily volume and to the number of shares available at the specified bid.

That will inform you about whether your order will push the price away. A nextmarkets online account will make the basic volume and bid/ask data available to you, and when you get more experienced you should look into Level 2 quotes. Learn how to leverage the data with our section on the Donchian Channel Strategy.

The right mindset for broker strategies

Trading is a game of the mind, and the mind is prone to wreaking serious havoc when overrun with data. Traders need to try to avoid a phenomenon known as ‘confirmation bias’ – the tendency to find, interpret, prioritise and recall information to confirm one’s own beliefs of hypotheses whilst ignoring information that contradicts them.

When trading with nextmarkets, confirmation bias can cause you to see a setup and quickly convince yourself to buy or sell. This can be exacerbated by technical analysis, where you think you see patterns and act on them. One’s success with trading strategies is all about discipline and psychology. Mastering this will help find, for example, the Bollinger Band strategy.

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Did you know?

At nextmarkets, we are committed to safeguarding the future of your success in trading. We have several protective measures in place:

  • All funds up to 20,000 EUR are protected by the Maltese Investor Protection Scheme
  • You can start trading with just 500 EUR
  • We’re backed by global investors Peter Thiel, FinLab, Founders Fund and Falk Strascheg

Some simple online brokerage methods

When you’re new to trading, the markets can be a dangerous game where your inexperience might be costly. Here are some basic online brokerage methods that you can deploy as fundamental principles for your smart broker strategies:

  • Get educated – as a trader, you need to be up on the latest news and events that will affect stocks and the market, as well as understanding basic trading procedures.
  • Start small – beginners should focus on just one or two stocks during each session. This will make it easier to track and identify opportunities. To make quick small profits, try adopting the scalping strategy.
  • Be realistic – a strategy doesn’t have to win all the time to be successful. Many traders only win with 50-60% of their trades.
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Finding online broker strategies that work

At nextmarkets, we emphasise supporting our clients in their growth to fulfil their potential as traders. As such, we provide tools and resources to educate everyone who uses our online broker app, empowering them to find the online broker strategies that work for them.

On the nextmarkets platform, you will have all you need to learn your own tactics and even practice through our fully-featured demo account. This will enable you to gain experience in your chosen strategy and develop the necessary patience and discipline, as well as the knowledge and understanding, to succeed.

Reinforcing online broker strategies for beginners

Once you have an idea of the basic principles of your strategy you need to understand how to recognise entry points. There are various tools to help reinforce online broker strategies for beginners, including:

  •  ECN and Level 2 quotes – ECN computer systems display the top available bids and request quotes from numerous market participants before matching and executing orders. Level 2 quotes are a subscription-based service within online broker software, providing real-time data from the Nasdaq order book. Together, these two tools can give you a strong sense of executions as they happen.
  • Live news services – stocks are moved by the unfolding news, so it’s essential to follow multiple live news services that may reveal market-moving news.
  • Candlestick charts – these provide a truly raw analysis of price action for you to follow.
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Online broker strategies UK revealed

There was a time when prospective traders needed to get an inside track to learn about successful strategies. They would have to know someone in the business or have the money to work with a top-notch broker, to even get a sniff of what the most prosperous traders were doing. But today, online broker strategies are revealed to UK traders through the miracle of the internet!

At nextmarkets, we always work hard to make as many powerful tools and resources as possible available to our clients. To that end, we reveal many of the best online broker strategies for you to adopt and adapt to your own ends. And we are an established online broker with PayPal, making it simple to plan your strategy around secure, safe transactions.

Common mistakes with broker strategies

The biggest error a new trader can make is not having a broker strategy or sticking to it. Many beginners who do develop a plan are more likely to abandon it than veteran traders as soon as things seem not to be going their way. Another common mistake is failing to implement a stop-loss order, which can cap your losses before they become too significant.

Inexperienced traders may also hold onto a losing position in hopes of a reversal of fortunes, which can cause losses to mount up. And using excessive margin/leverage can lead to exaggerated losses. There are many mistakes a trader should avoid, and they are mostly connected to strategy. Learning to develop a good strategy when trading with nextmarkets and sticking to it is key to success.

Live or die by broker strategies

At nextmarkets, we are a broker who really wants to see our clients succeed. Our platform is designed to be welcoming to both new traders and seasoned veterans looking to expand their portfolio. Our wealth of resources will help you develop your own strategies and apply them to your daily trading to give you the best chance of success.

It is the responsibility of the broker to support every client in their attempts to succeed in the markets. As such, it is absolutely fundamental to work to strong strategies which you adapt to changing markets, but never stray from. When you trade on the nextmarkets platform, you are in good hands.

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