Mastering short-term and long-term trading

6
min read

Mastering short-term and long-term trading

6
min read
A stopwatch symbolising the importance of time management and strategy in short-term and long-term trading.
Lesson
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Heading

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Duration
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minutes

Trading is a bit like playing games-fast and thrilling like Jenga, or slow and strategic like chess. Short-term trading is all about making quick, well-calculated moves, while long-term trading requires patience and strategy to win in the long run. So, which style suits you best? 

Let’s break it down.


Short-term trading: The fast-paced game

Short-term trading means buying and selling assets within a short time-sometimes minutes, sometimes days. Think of it like riding the waves, using market trends and technical analysis to catch profitable opportunities. This approach requires sharp decision-making, discipline, and an eye for patterns.

Key ingredients for short-term success:

  • Market knowledge – Stay updated on economic events and trends.
  • Technical analysis – Use indicators like RSI and moving averages to make informed trades.
  • Risk management – Set stop-loss orders to control potential losses.
  • A solid plan – Define your entry and exit strategies and stick to them.
  • Discipline – Keep emotions in check and don’t chase losses.
  • Technology – Leverage trading platforms, tools, and automation.

If you’re looking to dive into short-term trading, Deriv offers multiple platforms, including Deriv MT5, cTrader, and Deriv X, to help you execute quick trades with real-time market data.


Long-term trading: Playing the long game

Unlike the rapid-fire nature of short-term trading, long-term trading is about patience and big-picture thinking. Investors hold positions for weeks, months, or even years, relying on market fundamentals rather than daily price swings. This strategy is ideal for those who prefer a steady, calculated approach.

The essentials of long-term trading:

  • Fundamental analysis – Study company performance, industry trends, and economic conditions.
  • Patience – Stick with your investments through market ups and downs.
  • Diversification – Spread investments across different assets to reduce risk.
  • Regular reviews – Check in on your portfolio and adjust if needed.

For long-term trading, Deriv’s MT5 swap-free accounts allow you to hold positions longer without swap fees, making them more cost-effective. Just keep in mind that after a five-day grace period, an administration fee applies.

Short-term vs. long-term trading at a glance

Feature Short-term trading Long-term trading
Timeframe Minutes to days Months to years
Focus Quick price movements Long-term growth
Analysis type Technical analysis Fundamental analysis
Risk level Higher (fast-paced) Lower (steady growth)
Emotional control Essential Required, but less intense


Your next move in trading

Whether you're drawn to the thrill of short-term trading or the slow, steady path of long-term investing, Deriv has platforms and tools to support your strategy. If you're unsure where to start, practise risk-free with a Deriv demo trading account before going live.

Quiz

Which type of trading requires more patience?

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Short-term trading
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Long-term trading
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Both require the same amount of patience
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FAQs

Can I mix short-term and long-term trading?

Absolutely! Many traders use a mix of both strategies to balance risk and rewards.

Is short-term trading riskier than long-term trading?

Yes. Since short-term trading involves quick decisions and market volatility, it carries a higher risk than long-term trading, which focuses on steady growth.

What’s the best trading strategy for beginners?

It depends on your risk tolerance. If you prefer a slow and steady approach, long-term trading is ideal. If you enjoy fast decision-making, short-term trading might be a better fit.