#TradingTypes101 is typically refers to an introductory overview of the different styles and approaches to trading in financial markets. It’s often used as a beginner-friendly guide to help new traders understand the various ways people engage with markets like stocks, crypto, forex, or commodities.
Here’s a breakdown of the main trading types covered in a "Trading Types 101" guide:
📊 1. Day Trading
Definition: Buying and selling assets within the same trading day.
Timeframe: Minutes to hours.
Goal: Profit from short-term price movements.
Needs: Fast decision-making, technical analysis, and often leverage.
🕒 2. Swing Trading
Definition: Holding trades for several days to weeks.
Timeframe: Short- to medium-term.
Goal: Catch short- to mid-term trends or "swings" in the market.
Tools: Combination of technical and fundamental analysis.
🧘♂️ 3. Position Trading
Definition: Long-term trading, sometimes holding for months or years.
Timeframe: Long-term.
Goal: Capitalize on major market trends.
Style: More like investing, requires patience and macro-level analysis.
⚡ 4. Scalping
Definition: Ultra-short-term trading, holding positions for seconds to minutes.
Timeframe: Very short.
Goal: Make many small profits throughout the day.
Tools: High-speed trading platforms, low latency, and tight spreads.
🌍 5. Algorithmic / Quant Trading
Definition: Using algorithms or mathematical models to execute trades.
Approach: Automated, rule-based.
Users: Quants, institutions, and some advanced retail traders.
Edge: Speed, backtesting, and data analysis.
📉 6. Copy Trading / Social Trading
Definition: Mimicking trades of professional traders through platforms.
Ideal for: Beginners who want to learn or earn passively.
Risks: Reliance on others' decisions, lack of strategy control.
Bonus: 🧠 Discretionary vs. Systematic Trading
Discretionary: Decisions made by the trader based on judgment.
Systematic: Based on predefined rules or algorithms. $ETH