#TradingTypes101

Trading Types 101: Basic Strategies

These are the main styles in which traders operate, defined by the time frame in which they hold their trades:

1. Day Trading What is it? Opening and closing all trades within the same trading day. No positions are held open overnight. Objective: To capture short-term price movements, taking advantage of daily volatility. Frequency: High. Ideal for: Traders with available time, who can monitor the market closely and react quickly. Requires discipline and strict risk management. 2. Scalping What is it? An extremely fast form of day trading, opening and closing trades in a matter of seconds or minutes. Very small but frequent gains are sought. Objective: To accumulate profits through a large number of tiny trades. Frequency: Very high. Ideal for: Very experienced traders, who can make ultra-fast decisions and tolerate high stress. Requires a large capital for small gains to be significant and low commissions. 3. Swing Trading What is it? Holding trades open for a period of days to several weeks. It seeks to capture larger "swings" (price movements) than day trading, following medium-term trends. Objective: To take advantage of price oscillations within a larger trend. Frequency: Medium. Ideal for: Traders who cannot be glued to the screen all day, but who are willing to analyze the market regularly. Requires patience. 4. Position Trading What is it? Holding trades open for a period of weeks, months, or even years. It is based more on fundamental analysis and long-term macro trends, ignoring daily volatility. Objective: To capture very large price movements based on fundamental changes or market cycles.