#TradingTypes101 "Trading Types 101" refers to the fundamental strategies and approaches people use to buy and sell financial assets in the market. Here's a simplified breakdown:
Based on Timeframe:
* Scalping: Extremely short-term trading, often holding positions for seconds or minutes, aiming to profit from tiny price fluctuations. High frequency, small gains per trade.
* Day Trading: Buying and selling assets within the same trading day, closing all positions before the market closes. Aims to capture short-term price movements and avoid overnight risk.
* Swing Trading: Holding positions for a few days to several weeks, looking to capitalize on short to medium-term price "swings" or trends. Less intense than day trading.
* Position Trading: A long-term strategy where traders hold assets for months or even years, aiming to profit from major trends and fundamental shifts in the market. Requires less active monitoring.
Based on Approach/Analysis:
* Technical Trading (Technical Analysis): Analyzing historical price movements, chart patterns, and trading volumes to predict future price direction.
* Fundamental Trading (Fundamental Analysis): Basing trading decisions on the intrinsic value of an asset, derived from analyzing economic, industry, and company-specific data (e.g., earnings reports, news events).
* Momentum Trading: Buying assets that are trending strongly in a particular direction (up or down) and selling when the momentum starts to fade.
* Trend Trading: Identifying and following established market trends, aiming to ride the trend for as long as it lasts.
Common Markets/Assets Traded:
* Stocks/Shares: Ownership units in a company.
* Forex (Foreign Exchange): Trading currency pairs (e.g., EUR/USD), speculating on their relative values.
* Commodities: Raw materials like oil, gold, silver, agricultural products. Can be traded physically or via futures contracts.
* Bonds: Debt instruments issued by governments or corporations.
* Options: Contracts that give the buyer the right,