TRADING TYPES 101
trading is the act of buying and selling assets with the goal of making a profit there are many types of trading each with its own style time frame and strategy
1 spot trading
this is the most basic type of trading where assets are bought and sold for immediate delivery at the current market price it is simple and direct
2 margin trading
in this type of trading you borrow funds to trade larger positions it allows you to amplify gains but also increases the risk of losses
3 futures trading
futures are contracts to buy or sell an asset at a future date and price traders use futures to speculate on the price movement of assets like bitcoin oil or gold
4 options trading
options give traders the right but not the obligation to buy or sell an asset at a set price before a certain date they are used for speculation and hedging
5 day trading
day traders open and close positions within a single day they rely on price movement within short time frames and often use charts and technical analysis
6 swing trading
swing traders hold trades for several days or weeks to capture medium term price trends it requires patience and good market timing
7 scalping
scalping is a fast paced trading style where traders make many small trades throughout the day to profit from minor price changes
8 algorithmic trading
this involves using computer programs and algorithms to execute trades automatically based on pre set rules it is common in large financial institutions
9 copy trading
in copy trading beginners copy the trades of experienced traders it is popular on social trading platforms like etoro or binance
10 arbitrage trading
arbitrage involves buying an asset on one exchange where the price is low and selling it on another where the price is high this takes advantage of price differences
each trading type has its own pros and cons choosing the right one depends on your goals risk tolerance and how much time you want to spend trading.
