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Chapter 8




Peter Read, CEO and Founder of Pelican
Apr 18, 2018


Choosing a strategy



Spread betting and CFD trading is an excellent investment tool for good decision makers. It is quick and capital and tax efficient. However, making good trading decisions is not easy and has proved beyond the ability of some of humanity's finest minds. Most trading platforms leave you to figure this out on your own, which is a herculean task and likely to end in failure. Pelican is different. We want you to  become a profitable trader as quickly as possible.

To a large degree this will be determined by choosing a trading strategy that is right for you. There is no single way to trade. People have become wealthy through trading by pursuing many different strategies from long-term buy-and-hold investors like Warren Buffet to tick-by-tick algo traders. However, these can be split into three three broad categories; day traders, swing traders and trend traders.


Day traders



As the name implies, day traders hold trades open for less than a day. Consequently they make many trades. This strategy requires significant time commitment as you will have to be monitoring the screens on an ongoing basis. Day traders typically specialise in a small number of major markets or certain popular shares.


Swing traders



Swing traders keep their trades open for many days in the expectation that market movements often play out over a weekly timeframe. It is entirely possible for this style of trading not to interfere with any other activity you are pursuing. Like Day traders, Swing traders usually specialise in a small number of the major markets.


Trend traders



Trend traders take a long term view of the market and will potentially keep their trades open for many months. Trend traders look to build up positions in markets that are trending through multiple trades. Consequently they will place comparatively few traders relative to Swing or Day traders. They are also market agnostic and will often trade equity markets which will have much less liquidity than the major markets that Day and Swing Trader concentrate on.

Needless to say, all of the above strategies are well represented on Pelican. The Discover section allows you to assess the performance of many experienced traders specialising in the above strategies.


How long does it take to become a good trader?



You can copy a good trading strategy as soon as you find one on Pelican. However, this is different from becoming a good trader. Whilst we welcome everyone on to Pelican it is always our aim to empower our users to make decisions for themselves. It is a commonly told truism that it takes 10,000 hours to become an expert. Learning to trade is no different.  Pelican is the perfect platform to achieve this as it not only provides the education material but also monitors your progress as you develop.


How much capital do I need to start trading?



Different strategies require different amounts of capital. Mentors will advise on the capital required for the strategies that they pursue. However, the average deposit size across the industry is £5,000.





 



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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
Between 74-89% of retail investors lose money when trading CFDs
You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.



Spread betting and CFD trading are leveraged products and as such carry a high level of risk to your capital which can result in losses greater than your initial deposit. These products may not be suitable for all investors. CFDs are not suitable for pension building and income. Ensure you fully understand all risks involved and seek independent advice if necessary.
Pelican Trading is a trading name of London & Eastern LLP. London & Eastern is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 534484. London & Eastern is registered in England & Wales, registered office at 85 Great Portland Street, First Floor, London, W1 W7LT, company number OC345870.
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