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Sunday, 6 November 2011

Types of trading

Trade is the transfer of ownership of goods and services from one person to another. Trade is also called commerce or financial transaction or barter. A network that allows trade is called a market.
There are several types of trading styles.
1. Day trading: Day traders buy and sell stocks throughout the day. The fluctuations in the stocks allow them to earn quick profits. The object of day trading is to quickly get in and out of any particular stock for a profit on an intra-day basis. Day trading is also divided into two types scalpers and momentum traders. Scalpers style of day trading involves the rapid and repeated buying and selling of a large volume of stocks with in seconds or minutes. Momentum trader style of day trading involves identifying and trading stocks that are in a moving pattern during the day.
2. Swing Trading: The main difference between day trading and swing trading is that swing traders normally have a slightly longer time horizon than day traders for holding position is a stock.swing traders are willing to hold stocks for more than one day. Swing traders has the capability of providing higher returns than day trading but there are some significant risks in carrying positions overnight. For Example news, events and earnings, warnings announced after the closing bell can result in large, unexpected and possibly adverse changes to a stocks price.
3. Position trading: Position trading is similar to swing trading, but with a longer time horizon Position traders hold stocks for a time period from one day to several weeks or months. These traders seek to identify stocks where the technical trends suggest a possible large movement in price is likely to occur.
4. On line trading: Online trading is not a trading style. Online traders , which can include long term investors as well as day, swing and position traders, use either an internet connection or a direct access online trading platform to access and execute trades with web based brokers.


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worldknowledge said...

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deepak sahu said...

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