Great! Letโs go over Trading Type 101 โ a beginner-friendly overview of the main types of trading in financial markets.
๐ง What is Trading?
Trading is the act of buying and selling financial instruments like stocks, currencies, commodities, or cryptocurrencies to make a profit.
๐ Main Types of Trading
Day Trading
What: Buying and selling assets within the same day.
Goal: Profit from small price movements.
Time Frame: Minutes to hours.
Needs: Fast decision-making, technical analysis skills.
Swing Trading
What: Holding positions for several days to weeks.
Goal: Capture short- to medium-term price swings.
Time Frame: Days to weeks.
Needs: Market trend analysis, patience.
Scalping
What: Making dozens or hundreds of trades in a day.
Goal: Small profits from very short-term price changes.
Time Frame: Seconds to minutes.
Needs: Speed, low trading fees, discipline.
Position Trading
What: Long-term holding based on macro trends or fundamentals.
Goal: Large profits over weeks, months, or years.
Time Frame: Weeks to years.
Needs: Fundamental analysis, patience.
Algorithmic Trading
What: Using computer programs and algorithms to trade.
Goal: Automate strategies for speed and precision.
Time Frame: Variable (depends on algorithm).
Needs: Coding knowledge, data access.
๐ Types of Markets You Can Trade In
Stock Market: Shares of companies (e.g., Apple, Tesla).
Forex (Foreign Exchange): Currencies (e.g., USD/EUR).
Commodities: Gold, oil, silver.
Cryptocurrency: Bitcoin, Ethereum, etc.
Options/Futures: Contracts based on future price expectations.
๐งฐ Tools Youโll Need
Broker account
**Charting