Trading is the process of buying and selling financial assets with the aim of making a profit from price movements. Trading can take place in various financial markets and using diverse strategies. Here are the main types of trading:
1. Types of trading based on the holding period:
* Scalping: Very fast trading where positions are opened and closed within seconds or a few minutes to take advantage of very small price movements. It requires high concentration and quick decisions.
* Day Trading: Positions are opened and closed on the same trading day, and no positions are held open for the next day to avoid overnight market risks. Day traders aim to make small, repeated profits from daily fluctuations.
* Swing Trading: Holding positions for several days or weeks to take advantage of medium price movements. Swing traders focus on technical analysis and are more aware of fundamental news.
* Position Trading/Long-term Trading: Holding positions for months or even years, based on fundamental market analysis and long-term growth forecasts:
Manual trading:
Algorithmic trading (automated)
Important tips:
Understanding risks
Learning and analysis
Risk management
Practicing on a demo account