What are the 4 types of trading?

 

  • Scalping: Imagine a stock market fishmonger! Scalpers aim to profit from tiny price movements throughout the day. They enter and exit positions very quickly, often multiple times within minutes, accumulating small gains that add up over time. This requires intense focus, fast reactions, and high-frequency trading platforms.

  • Day Trading: Day traders are active participants, buying and selling positions within a single trading day. Their positions are typically closed before the market closes to avoid overnight risk. They use technical analysis tools to identify short-term trends and capitalize on market volatility.

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  • Swing Trading: Swing traders hold positions for a few days or weeks, aiming to capture profits from price swings with a bit more breathing room than day traders. They focus on identifying trends with a slightly longer time horizon and might use a combination of technical and fundamental analysis.

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  • Position Trading: Position traders take the long view, holding positions for months or even years. Their focus is on underlying company fundamentals, economic trends, and long-term market outlooks. They are less concerned with short-term fluctuations and aim to profit from major market movements or steady company growth over time

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