📌 Different 'trading Styles' ❗❗ 🤔
-Trading encompasses four main styles: scalping, day trading, swing trading, and position trading. The differences among the styles are based on the lengths of time that trades are held. Scalping trades are held for only a few seconds, or at most a few minutes. Day trades are held for a few seconds to a couple of hours. Swing trades may be held for a few days. Position trades are held from a few days to several years.
Novice traders can have trouble choosing the trading style that best suits their personality, but you must do so to achieve long-term success as a professional trader. If you are a trader and do not yet feel as though you have found your trading style, you still can. Here are some of the personality traits that go with the different styles of trading.
>>Choosing a trading style requires the flexibility to know when a trading style is not working for you. It also requires the consistency to stick with the right style, even when its performance lags.
One of the biggest mistakes that new traders make is to change trading styles (and trading systems) at the first sign of trouble. Constantly changing your trading style or trading system is a sure way to catch every losing streak. Once you are comfortable with a trading style, remain faithful to it. The loyalty will reward you with results in the long run.
Sources:thebalance.com
Novice traders can have trouble choosing the trading style that best suits their personality, but you must do so to achieve long-term success as a professional trader. If you are a trader and do not yet feel as though you have found your trading style, you still can. Here are some of the personality traits that go with the different styles of trading.
- 1.Scalping
Scalping is a very rapid trading style. Scalpers often make trades within just a few seconds of each other, and often in opposite directions. That means they may go long one minute but short the next.
Scalping is best suited to active traders who can make instant decisions and act on them with no hesitation.
Impatient people often make the best scalpers, because they expect their trades to make a profit right away. They will exit the trade quickly if it goes against them.
To succeed as a scalper requires focus and concentration. It is not a suitable trading style for anyone who is easily distracted or prone to daydreaming. So if you've been thinking about something else while reading this, then scalping might not be for you.
*2.Day Trading
Day trading suits traders who prefer to start and complete a task on the same day. That's you if you are the type who starts to paint your kitchen and won't go to bed until the job is finished, even if that means staying up until 3 a.m.
Many day traders would never make swing or position trades. They would not be able to sleep at night knowing they had an active trade that could be affected by price movements during the night.
*3.Swing Trading
Swing trading is good for people who have the patience to wait for a trade, but want a quick profit soon after they enter it. Swing traders almost always hold their trades overnight. So if you'd be nervous holding a trade while away from a computer, this is not the style for you. Swing trading generally requires a larger stop-loss than day trading. The ability to keep calm when a trade is against you is vital.
*4.Position Trading
Position trading is the longest term trading of all. It often involves trades that last for several years. Thus, position trading is only suited to the most patient and least excitable traders. Its targets are often several thousand ticks. If your heart starts beating rapidly when a trade is at 25 ticks in profit, position trading is probably not for you.
Position traders must be able to ignore popular opinion. A single position trade will often hold through both bull and bear markets. For instance, a long position trade may need to be held through a full year when the general public is convinced that the economy is in a recession. If other people can easily sway you, then position trading will be a challenge for you.
>>Choosing a trading style requires the flexibility to know when a trading style is not working for you. It also requires the consistency to stick with the right style, even when its performance lags.
One of the biggest mistakes that new traders make is to change trading styles (and trading systems) at the first sign of trouble. Constantly changing your trading style or trading system is a sure way to catch every losing streak. Once you are comfortable with a trading style, remain faithful to it. The loyalty will reward you with results in the long run.
Sources:thebalance.com
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