Connect with us

Resources

Exploring Different Trading Styles: Scalping, Day Trading, Swing Trading

kokou adzo

Published

on

options swing 6083677 1280

When it comes to maintaining a successful trading journey, having a good trading style is quite important. It’s highly dependent on the personality of the trader and has a lot to do with the inevitable profits. It also guides the traders on how to enter and exit the markets to boost profits.

Now when we talk about trading styles, traders have developed several effective strategies to match their convenience and risk-taking potential. All you need to do is select the right style for you and get the inside scoop on FXTM. Here are some details on its styles:

Scalping

Scalping is a trading approach where you make a large number of trades within a short time span to benefit from the minor fluctuations that happen in the timeframe. It’s a simple method where traders open and close their position in seconds or minutes. Traders who are involved in scalping trading styles are called scalpers. They need to do everything under a strict plan as any gigantic loss can impose a greater threat to the smaller profits earned as of now. So, if you can make quick and smart decisions, scalping can definitely be your trading style.

With scalping, traders benefit from small price movements and earn profits from the trade volumes. Usually, scalpers can place anywhere between ten to a hundred trades each day.

Pros:

  • Can be performed through smaller capital amounts
  • Hold short-term positions meaning lesser risks
  • Requires less fundamental analysis

Challenges:

  • Time-consuming
  • Requires a large number of trades with a good percentage ratio

Day Trading

As you may have understood by the name itself, day trading simply stands for trading (buying and selling) securities within the same day. The main approach is to earn as much profit as you can when the market is active. Once the market closes, you must close/shut all your positions.

Day trading is something that’s ideal for short-term investments. You are likely to find it desired by traders who can trade well in an exciting and risky environment. A good thing about day traders is that it has decent profit opportunities, however, the success rate may not be as desired. This is especially because it requires overall proficient skills and long-term experience.

Pros:

  • Easy to get started. Just requires a laptop and internet connectivity.
  • Get full control of your time
  • If you are good with it, you can make money fast.

Challenges:

  • Risks may occur, and you must be prepared to deal with them.

Swing Trading

In swing trading, too, the traders hold the position for a short span of time. Here, the trader usually holds the securities for only certain days or months to earn adequate profits. Although the opening positions are fewer, it’s likely to generate good profits and incur losses. To get the edge in the market, traders use technical and fundamental analysis, clear knowledge of basics like crypto glossary (if trying crypto trading), along with trends interpretation to come up with the best strategies.

Pros:

  • Minimal time commitment
  • Capital management flexibility
  • Quick and short-term profits

Challenges:

  • Vulnerable to sudden market events

Position Trading

Position Trading is a trading style used by professionals who believe that the market is likely to change in the long term. They aren’t into short-term volatility, rather than long-term price action. The thumb rule they apply is to wait for its trade to reach its peak. Once that happens, only then do they close the trade otherwise, they wait. Traders who are interested in this trading style usually open positions every quarter.

Position trading is associated with extensive risks, although if done right, the profits are good. People who follow this approach believe in long-term investments and profits rather than the short ones.

Pros:

  • Less associated stress
  • Good and long-term profit potentials
  • Time flexibility and fewer transaction cost

Challenges:

  • Difficulty in predicting the trends
  • Low trading opportunities

Tips to Implement Trading Styles

As mentioned earlier, you must choose a trading style as per your personality. Here are some quick tips:

  • If you are skilled at making immediate and correct decisions, scalping is a must-try strategy for you.
  • If you are a person who wants to complete the trading on the same day, you must try day trading.
  • For people who can hold a trade overnight, swing trading is a perfect style.
  • If a trader is patient and believes in markets, it’s worth trying position trading.

 

Kokou Adzo is the editor and author of Startup.info. He is passionate about business and tech, and brings you the latest Startup news and information. He graduated from university of Siena (Italy) and Rennes (France) in Communications and Political Science with a Master's Degree. He manages the editorial operations at Startup.info.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Top of the month

Copyright © 2023 STARTUP INFO - Privacy Policy - Terms and Conditions - Sitemap - Advisor

ABOUT US : Startup.info is STARTUP'S HALL OF FAME

We are a global Innovative startup's magazine & competitions host. 12,000+ startups from 58 countries already took part in our competitions. STARTUP.INFO is the first collaborative magazine (write for us or submit a guest post) dedicated to the promotion of startups with more than 400 000+ unique visitors per month. Our objective : Make startup companies known to the global business ecosystem, journalists, investors and early adopters. Thousands of startups already were funded after pitching on startup.info.

Get in touch : Email : contact(a)startup.info - Phone: +33 7 69 49 25 08 - Address : 2 rue de la bourse 75002 Paris, France