We found 11 online brokers that are appropriate for Trading Directional Trading Strategies.
What are directional trading strategies? This could be one of the primary questions of many investors, particularly for those who are beginners or novice traders. Directional trading strategies utilize the upward or downward movements of the market. If it is believed that the market may go up, one can take a long position and buy. Similarly, if it is believed that the market may fall, the strategy would be to take a short position and sell. Many experienced investors use directional trading strategies to make speculations on a volatile market.
To be more specific, directional trading strategies include: box spread, strangle, and straddle strategies.
There are four types of directional trading strategies - bull call, bull put, bear call, and bear put. Let's have a look at each of these in more detail.
If the market seems good, investors create what is deemed a 'bull call', believing the price may rise. It is done by opting to buy a call option at a lower strike price. The investors then sell a call option at a higher strike price. Buying means paying a premium. This is higher for options at a lower strike price. The reason for this is greater value.
Usually, buying a call option is expensive, so many opt for selling a call. This results in collecting a premium. Thereafter, a bull call is created.
This too is an assumption that, since the market is good, prices may rise. It is just like bull calls, but investors use put options. They buy a put at a lower strike price and create what are called, 'bull puts'. They may even opt for selling a put at a higher strike price. If compared with a long put amid falling price, a bull put results in lower losses. However, the earning is capped here, and cash flow becomes less volatile.
When it is believed that prices may fall, a 'bear call' is created by either selling a call at a lower strike price, or buying a call at a higher strike price. Similar to directional strategies, the gains and losses of this option are very limited, but the reward is less volatility. It would mean fewer losses for investors if market prices end up rising with a bear call, unlike for investors with other call options.
A 'bear put' creates a profit when there is a fall in market prices, similar to bear calls. The investor creates a bear put by selling puts at a lower strike price and buying them at a higher strike price. It should be noted here, that a bear put is always cheaper than simply buying a put option. Investors collect a premium after selling a put option, which offsets the cost of buying a new put option at a higher strike price. Put options help the buyer to sell the underlying assets at a higher strike price. Higher strike price means more income.
Directional trading strategies function well in the market, because investors are aided in minimizing risks. They can also curtail costs and protect cash flow with more accuracy. Hence, it is important to understand directional trading strategies better. This will help in creating more complex strategies later.
In this article, titled 'Directional Trading Strategies', we discussed details that will assist investors in understanding the concept so they can create more complex strategies.
With the help of directional trading strategies, investors try to make money by speculating on the market direction. We discussed bull call, bull put, bear call, and bear put. We also briefly mentioned how investors can minimize their risk.
Directional trading strategies help in bringing down the cost of options, as well as volatility.
Beginners or novice traders may find these strategies complicated, and fully understanding them could take longer than it would for experienced traders. Hence, it is recommended that they know the strategies better before implementing them. It cannot be stressed enough that even a minor error in the financial market may end up with a great loss. A better option is to start with a demo account to test whether these strategies function correctly. A demo account offers real exposure to the market using virtual money, so no actual money will be lost.
We've collected thousands of datapoints and written a guide to help you find the best Directional Trading Strategies for you. We hope this guide helps you find a reputable broker that matches what you need. We list the what we think are the best directional trading strategies below. You can go straight to the broker list here.
There are a number of important factors to consider when picking an online Directional Trading Strategies trading brokerage.
Our team have listed brokers that match your criteria for you below. All brokerage data has been summarised into a comparison table. Scroll down.
We compare these features to make it easier for you to make a more informed choice.
Here are the top Directional Trading Strategies.
Compare Directional Trading Strategies min deposits, regulation, headquarters, benefits, funding methods and fees side by side.
All brokers below are directional trading strategies. Learn more about what they offer below.
You can scroll left and right on the comparison table below to see more directional trading strategies that accept directional trading strategies clients
Broker |
eToro
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IC Markets
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XTB
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FP Markets
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Trading212
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Plus500
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Pepperstone
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EasyMarkets
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XM
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FXPrimus
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SpreadEx
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Regulation | Financial Conduct Authority (FCA), Cyprus Securities and Exchange Commission (CySEC), Markets In Financial Instruments Directive (MiFID), Australian Securities and Investments Commission (ASIC) | Australian Securities and Investments Commission (ASIC), Financial Services Authority (FSA), Cyprus Securities and Exchange Commission (CySEC) | Financial Conduct Authority (FCA), FCA number FRN 522157, Cyprus Securities and Exchange Commission (CySEC), CySEC Licence Number: 169/12, Comisión Nacional del Mercado de Valores, Komisja Nadzoru Finansowego, Belize International Financial Services Commission (IFSC) under license number IFSC/60/413/TS/19, Polish Securities and Exchange Commission (KPWiG) | Australian Securities and Investments Commission (ASIC), Cyprus Securities and Exchange Commission (CySEC) | Financial Conduct Authority (FCA), Financial Supervision Commission (FSC) | Plus500UK Ltd authorized & regulated by the FCA (#509909), Plus500CY Ltd authorized & regulated by CySEC (#250/14), Plus500AU Pty Ltd (ACN 153301681), ASIC in Australia AFSL #417727, FMA in New Zealand, FSP #486026 and Authorised Financial Services Provider in South Africa FSP #47546 | Financial Conduct Authority (FCA), Australian Securities and Investments Commission (ASIC), Federal Financial Supervisory Authority (BaFin), Dubai Financial Services Authority (DFSA), Capital Markets Authority of Kenya (CMA), Pepperstone Markets Limited is incorporated in The Bahamas (number 177174 B), Licensed by the Securities Commission of the Bahamas (SCB) number SIA-F217 | Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investments Commission (ASIC) | International Financial Services Commission (IFSC), Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investments Commission (ASIC) | Cyprus Securities and Exchange Commission (CySEC), Markets In Financial Instruments Directive (MiFID) | Financial Conduct Authority (FCA) |
Min Deposit | 200 | 200 | No minimum deposit | 100 | 1 | 100 | 200 | 100 | 5 | 100 | 1 |
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Used By | 17,000,000+ | 60,000+ | 250,000+ | 10,000+ | 14,000,000+ | 15,500+ | 10,000+ | 142,500+ | 70,000+ | 10,000+ | 10,000+ |
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Platforms | Web Trader, Tablet & Mobile apps | MT4, MT5, Mirror Trader, ZuluTrade, Web Trader, cTrader, Mac | MT4, Mirror Trader, Web Trader, Tablet & Mobile apps | MT4, MT5, IRESS, Mac, Web Trader, Tablet & Mobile apps | Web Trader, Tablet & Mobile apps | Web Trader, Tablet & Mobile apps | MT4, MT5, Mac, ZuluTrade, Web Trader, cTrader, Tablet & Mobile apps | MT4, Web Trader, Tablet & Mobile apps | MT4, MT5, Mac, Web Trader, Tablet & Mobile apps | MT4, Mac, Mirror Trader, Web Trader, Tablet & Mobile apps | Web Trader, Tablet & Mobile apps |
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Learn More |
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Up with trading212 |
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Up with plus500 |
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Up with pepperstone |
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Up with easymarkets |
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Up with xm |
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Up with fxprimus |
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Up with spreadex |
Risk Warning | 71% of retail investor accounts lose money when trading CFDs with this provider. | Losses can exceed deposits | 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. | Losses can exceed deposits | CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. | 76.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. | CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.3% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money | Your capital is at risk | Your capital is at risk | Losses can exceed deposits | Losses can exceed deposits |
Demo |
eToro Demo |
IC Markets Demo |
XTB Demo |
FP Markets Demo |
Trading 212 Demo |
Plus500 Demo |
Pepperstone Demo |
easyMarkets Demo |
XM Demo |
FXPrimus Demo |
SpreadEx Demo |
Excluded Countries | IR, KP, BE, CA, JP, SY, TR, IL, BY, AL, MD, MK, RS, GN, CD, SD, ZW, ET, GH, TZ, LY, UG, ZM, BW, RW, TN, SO, NA, TG, SL, LR, GM, DJ, CI, PK, BN, TW, WS, NP, SG, VI, TM, TJ, UZ, LK, TT, HT, MM, BT, MH, MV, KZ, GD, FJ, BB, BM, BS, AG, AI, AW, LB, SV, US, PY, HN, GT, PR, NI, VG, AN, | AF, GN, SL, BW, IR, SY, MM, IQ, TG, KH, LS, YE, CI , LR, ZW, CU, LY, TZ, CG, ML, BO, LR, NE, AO, GM, NG, AG, GH, KR, KG, GN, SN, NA | US, IN, PK, BD, NG , ID, BE | US, JP, NZ | US | MY, BE, US, CA, CN, ID, PH, TG, NG, DO, MA, ZW, PR, TZ, TN, UG, BW, AO, AE | BR, KR, IR, IQ, SY, JP, US | US | US, CA, IL, KR, IR, MM, CU, SD, SY | AF, CI, CU, IQ, IR, LY, MM, KR, SD, PR, US, AU, SY, DZ, JP, EC. | US, TR |
You can compare Directional Trading Strategies ratings, min deposits what the the broker offers, funding methods, platforms, spread types, customer support options, regulation and account types side by side.
We also have an indepth Top Directional Trading Strategies for 2021 article further below. You can see it now by clicking here
We have listed top Directional trading strategies below.