Three Types of Stock Trading You Need to Understand

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Stock trading is the most widely known form of trading, with billions of dollars in transactions that take place every day around the world.  Stock trading offers a variety of opportunities for stock investors to make money. Beauty of stock trading is its immense flexibility. You can invest in stock trading as a hobby, business, part-time or full-time source of income.

You can invest a small amount as you will spend your lunch in a restaurant, or you can invest hundreds of thousands of dollars.

You can trade stocks faster in a few minutes. You can complete the transaction by the end of the day, or you can invest in a few months, years, and all through your life. No need for “wind up” of your business.stock trading 10

1. Position Trading

Position trading can be defined as a trading style or strategy, where you have an investment position for a long period of time, which can range from a few days, weeks or months at a time.

Trade position is the longest term trading style. As a position trader, you do not have to sit glued to the monitor, as a day trader do who also waiting every time that what will happen next.

2. Swing Trading

Roughly speaking swing trading include trades that are usually held for a few days to several weeks. Swing traders hold stocks over shorter periods of position traders. Swing traders trying to earn profit from trading in the stock, “based on its intra-week or for a month fluctuates between optimism and pessimism.”

3. Day Trading

Day Trading, as the name implies, is generally limited to trading activity during most of the day trading. It includes the purchase and sale of shares in a short period of time. Day traders buy and sell stocks since the market opened in the morning and sell them off, before it closes. However, this is not a strict rule. They can hold their stock for the next day or even longer if the price falls.

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Day trading is often considered risky. But it may be advantageous for the serious investors who have learned techniques of the trading day, through study and experience. They know when to enter and exit a position. Successful day traders tend to be smart, critical and objective in their approach. They do not go by their emotions as beginners, who tend to lose more often.

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