Nick Goold
Trends are one of the most powerful forces in trading. Trading stock CFDs by sector opens up even more ways to find good trades. You can follow big stories in the market—like growth in AI, rising defense budgets, or changes in consumer habits. This makes it easier to trade based on your own ideas and what you believe will happen next. You can go long or short, focus on what’s hot, and avoid areas that are struggling. Sector trading helps you ride trends, lower risk by diversifying, and act on real news.
What Are Market Themes?
Market themes are big-picture ideas or events that drive groups of stocks in the same direction. Examples include:
- Tech booms (e.g., AI or chip manufacturing growth)
- Energy price surges (e.g., oil or renewables)
- Healthcare trends (e.g., drug breakthroughs or health crises)
Sectors tend to move together because companies in the same industry are affected by the same macro events, policies, or consumer behavior shifts.
Why Trade by Sector Instead of Just the Index?
Indexes like the S&P 500 or Nikkei 225 give you broad exposure, but they don’t let you fine-tune your positions based on specific market views. You’re also exposed to the entire economy, not just the sectors you understand best. With sector trading, you can:
- Focus on themes you understand (e.g., tech, defense, healthcare)
- Buy multiple stocks in the same sector to spread risk
- Hedge one sector against another (e.g., sell tech, buy defense)
Examples:
- Bullish on Japanese car makers? Buy Toyota, Honda, and Subaru together. You’re not relying on just one company.
- Expecting rising military budgets? Go long on U.S. defense contractors like Lockheed Martin, Raytheon, and General Dynamics.
- Think Japanese trading companies will outperform banks? Buy Itochu, Marubeni, and Mitsubishi Corp while shorting Mitsubishi UFJ and Mizuho.
The Benefits of Sector-Based Trading
Trading stock CFDs by sector gives you more flexibility and control over your trades. Instead of betting on the entire market, you can choose where to focus your attention based on strong or weak performance. This means you can:
- Go long on strong sectors that are trending upward
- Go short on weak sectors that are falling behind
- Trade both directions to find more chances to profit, regardless of overall market direction
Sector trading also helps you follow the news and trade what’s actually moving. You can trade one sector against another—like tech vs energy—or trade a strong sector against the whole market. This lowers your overall risk and gives you more ways to find good trades without guessing the direction of the entire market.
Sector Trading Strategies
1. Riding the Wave: Focus on sectors that are making higher highs and attracting strong buying interest. Look for confirmed uptrends and enter when price pulls back to support or breaks out with volume.
2. Betting Against Weakness: Identify sectors that are underperforming the overall market. These are often the first to drop when fear rises. Use short entries on failed rallies or breakdowns below key levels.
3. Sector Rotation: Markets go through cycles. When one sector cools off, another heats up. Watch for money flowing out of overbought sectors and into overlooked ones. You can rotate between themes as momentum shifts.
How to Spot Hot Sectors
Watch the news: Big stories can move sectors—like new government spending, natural disasters, major company announcements, tariff changes, or conflicts in the Middle East or elsewhere.
Track price movements: When several stocks in the same sector start rising at the same time, it could signal the start of a trend.
Check relative strength: Compare one sector’s performance against others. Stronger sectors will usually lead during rallies.
Common Beginner Mistakes
Jumping in too late: When a sector is already in the news and everyone is buying, the best part of the move might be finished. Try to catch trends early by watching for volume spikes or strong earnings.
Forgetting to take profits: Just like with forex, no trend lasts forever. Set clear targets or trailing stops so you don’t give back your gains.
Trading too many sectors at once: It’s better to trade one or two sectors well than spread yourself too thin. Focus on what you understand and follow the news closely.
Ignoring the overall market: Even if a sector is strong, a big drop in the overall market can drag everything down. Always keep an eye on the bigger picture.
Not adjusting position size: Some sectors are more volatile than others. Tech stocks move faster than consumer staples, for example. Adjust your trade size to manage risk.
Sectors Available on Titan FX MT5
Technology: Apple, Microsoft, NVIDIA, Intel, AMD, Adobe, Meta, Alphabet, Cisco, Sony, NEC, Mitsubishi Electric, IBM, Oracle, Broadcom, Qualcomm, Micron Technology, ADP, Intuit, Texas Instruments, Tokyo Electron, Keyence, Murata, Renesas
Healthcare: Johnson & Johnson, Pfizer, Moderna, Eli Lilly, AbbVie, Gilead Sciences, Biogen, Shionogi, Eisai, Chugai, Daiichi Sankyo, Abbott, Bristol-Myers Squibb, Cigna, Merck, Regeneron, Vertex, Thermo Fisher, ResMed, Intuitive Surgical, M3
Defense & Aerospace (Coming June 30!): Lockheed Martin, Raytheon Technologies, General Dynamics, Northrop Grumman, Curtiss-Wright, Textron, Kawasaki Heavy, Harris Corp, Mitsubishi Heavy, HEICO, Boeing, Japan Airlines
Consumer Discretionary: Amazon, Tesla, Nike, Netflix, Disney, McDonald’s, Starbucks, Fast Retailing, Oriental Land, Home Depot, Best Buy, Yum! Brands, Marriott, Ford, eBay, PayPal, Mondelez, Toyota, Subaru, Honda
Financials: JPMorgan, Citigroup, Bank of America, Mizuho, Sumitomo Mitsui, Mitsubishi UFJ, Wells Fargo, American Express, Mastercard, Visa, Tokio Marine, MS&AD Insurance, SBI Holdings
Industrial & Infrastructure: Caterpillar, 3M, GE, Hitachi, Daikin, Kawasaki Kisen, Nippon Steel, Nippon Yusen, JR East, JR Central, Fanuc, Denso, Mitsubishi Corp, Itochu, Marubeni, SMC, Fujitsu, SoftBank, Mitsubishi Electric, American Tower, CSX
Energy & Materials: ExxonMobil, Chevron, Inpex, Shin-Etsu Chemical, Philip Morris, Altria, Japan Tobacco, Tokyo Electric Power
Retail & Logistics: Walmart, Costco, Target, Rakuten, JD.com, UPS, Alibaba, Walgreens Boots Alliance, CVS Health, Sysco
Entertainment & Travel: Trip.com, Expedia, Booking Holdings, Royal Caribbean, Carnival, Wynn Resorts, Uber, Spotify
Telecommunications: AT&T, Verizon, T-Mobile, KDDI
Consumer Staples: Coca-Cola, Pepsi, Procter & Gamble, Unilever, Mondelez
Spotlight on Aerospace & Defense
Starting Monday, June 30, 2025, new aerospace and defense stocks will go live on Titan FX MT5. This latest expansion includes 13 stocks—10 from the U.S. and 3 from Japan—reflecting growing trader interest in sectors that respond quickly to global news, tensions, and policy changes. These industries often see sharp price moves driven by military budgets, security developments, and technological advancements.
The new stocks are: Curtiss-Wright Corp, General Dynamics Corp, HEICO Corp, Huntington Ingalls Industries, Howmet Aerospace, Leidos Holdings Inc, Harris Corp, Northrop Grumman Corp, Raytheon Technologies Corp, Textron Inc, Mitsubishi Electric Corp (三菱電機), NEC Corp (日本電気), and Kawasaki Heavy Industries Ltd (川崎重工業). The trading setup is the same as other Titan FX CFDs—fast execution, tight spreads, and flexible leverage.
Sector-based CFD trading is a smart way to apply your existing trading skills to focused opportunities. By trading strong themes and specific sectors, you can manage risk more effectively and stay in control. Titan FX gives you access to many U.S. and Japanese stocks on MT5, letting you trade what you understand, respond to real news, and take advantage of momentum—one theme at a time.
