Yes, it’s true, there are several types of trading. Knowing a little more about them will help you decide which one best suits your personality and your trading strategy. Although choosing from the diversity of exchanges is not an easy task, it is absolutely necessary to succeed in this type of market. Therefore, in this article we will talk a little about it.
they are four different types of trade, each has very different characteristics and modes of operation. In each case, their main difference is related to the time period in which the trades are open, which is obviously related to the timeframes that are used during the respective chart analysis.
Types of trading available
Operating time: seconds/minutes
Deadlines: very short
· transactions of the day
Operating time: minutes/hours
· swing trading
Duration of the operation: Hours / Days
· positional negotiation
Duration of the operation: Days / Weeks / Months
When we talk about scalping, we are referring to the fastest type of trading. In most cases, a scalper only holds positions open for a few seconds or minutes. Moreover, you also have the option of opening dozens of trades in the same session.
· By spending less time in the market, there is less exposure to events that influence the price.
· It is a very good option for traders who are active and make decisions quickly.
· Losing trades don’t have much impact, so losing streaks last less.
· It is a type of trading that requires great focus and concentration throughout the operation.
· Trading with very short timeframes means there is a lot of randomness when it comes to price movements.
· It is not a type of trading suitable for those who tend to trade more than they should and get frustrated with losses.
2- Trading day
Also known as intraday trading, it is a type of trading where a user enters and exits different trades throughout the day. In addition, open positions are rarely occupied during the night. A day trader is one who keeps his trades open for a few minutes or hours.
· With this trading, you reduce the risks due to GAPS at night and on weekends.
· After completing the session, it is possible to devote to other activities without having to realize the operations.
· It is easier for the trader to control his negative emotions by staying out of a trade, he is likely to find another in the rest of the day.
· This is very emotionally demanding trading. A streak of multiple losing traders can be destabilizing.
· A high level of concentration is required, because having to make decisions in a short time, one tends to make mistakes.
· day trading is very similar to scalpingusing small timeframes makes trading more difficult.
3- Swing trading
In the case of swing traders, they take fewer trades than swing types. previous trades. They usually use longer timeframes, such as weekly or daily. These types of trades often remain open for days or even weeks, requiring the trader to remain alert to large market movements.
· The routine for working with this type of trading is much slower compared to the other trades already mentioned. In addition, it requires less monitoring of positions.
· The trader has much more time to look for good opportunities and plan trades.
· This is an easier option to complete if you have a full-time job.
· It takes a lot of patience, as ticket production can take weeks.
· You are exposed to great risks at night and on weekends.
· This requires a lot of calm from the trader because he will be away from the computer for a long time.
4- Positional trading
This is the style with the longest extension time, in fact trades can be held open for weeks or even months. It takes a long time for an investor to grasp major market trends.
· Less time is needed to perform trading chart analysis.
· This is the type of trading that generally generates less stress and worry for the investor.
· It blends very well with any type of life.
· This requires a lot of patience as fewer signals are produced than in other types of trading.
· We must remain calm in the face of setbacks while tensions and doubts increase.
· In this trading, the capital is frozen for a long time, which prevents taking advantage of new opportunities.