Trading Types
🔹 1. Day Trading
Time Frame: Intraday (same day)
Typical Assets: Stocks, Forex, Options, Futures, Crypto
Goal: Profit from small price movements
Tools: Real-time charts, technical indicators
Pros: No overnight risk, quick gains
Cons: High stress, requires time and experience
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🔹 2. Swing Trading
Time Frame: Several days to weeks
Goal: Capture medium-term trends
Analysis Used: Combination of technical and fundamental
Pros: Less time-intensive than day trading
Cons: Subject to overnight and weekend risk
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🔹 3. Position Trading
Time Frame: Weeks to months (sometimes years)
Goal: Ride long-term trends
Analysis Used: Mostly fundamental, with technical entry/exit
Pros: Lower transaction costs, less stress
Cons: Requires patience and strong analysis skills
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🔹 4. Scalping
Time Frame: Seconds to minutes
Goal: Profit from micro price changes
Execution: High-frequency trading, tight spreads
Pros: Many opportunities daily
Cons: Extremely fast-paced, high commissions possible
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🔹 5. Algorithmic (Algo) Trading
Method: Automated trading via algorithms
Used By: Institutions and tech-savvy retail traders
Pros: Executes faster and emotion-free
Cons: Complex to build and monitor; risk of technical failures
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🔹 6. Trend Trading
Goal: Follow directional momentum (up/down)
Time Frame: Any (usually medium- to long-term)
Tools: Moving averages, trendlines, volume
Pros: Simple to understand
Cons: Whipsaws in sideways markets
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🔹 7. Mean Reversion Trading
Goal: Profit from prices returning to their average
Assets: Often used in stocks or pairs trading
Tools: Bollinger Bands, RSI
Pros: Profitable in ranging markets
Cons: Risky if market breaks out of range
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🔹 8. News-Based Trading
Goal: Capitalize on price movement after major news
Assets: Forex, stocks, commodities
Risk: High volatility
Pros: Can generate quick profits
Cons: Requires fast execution and news interpretation
