Different Styles Of Trading A Newbie Must Be Ready To Learn
18 January, 2021
Whenever you dig into an art, the first thing is to get fully acquainted with that world by learning all you can about that trade. Trading is no different as you have to be willing to read and do your research to find out the definition and meaning of things like a vanilla option or EFT is, for example. That said, here are four trading styles every rookie should eke to get elated fully into the trading world.
This kind of trading is just as the name suggests, which entails trading and closing all possible deals before the close of the day. This form of trading is very involving and demands a level of precision and attention that lasts the whole day. That means you must always be updated and on your toes most of the day to buy and sell at the best time suited for you. The good thing about this style is that it operates like a nine-to-five job, and you do not have to lose sleep trading. Secondly, you can use more than one leverage, and it is lucrative.
On the flip side, getting a working strategy may take time; you must always be online checking for signals, and you may take a lot of time before settling on a trade.
The second trading style is called swing trading that entails holding a position for more than a day, and the choice of closing is not limited to a day. And you capitalize on the swing of prices as you hold your position in a trade. With swing trading, beginners will not be haunted by the overwhelming need to be online but use the time they have to carry out the business. This means you can carry out trading on the side. The minus on swing trading is that you are highly to come across overnight risks while you hold on to positions that may fluctuate while you were away.
If you thought swing trading is slow, then get introduced to position trading, which entails holding positions to even years if you so wish to. This style is only suited for long term trends, and beginners looking into trading on the side could try it out. The transactional fees are at a minimum since you may hold your position for a year or more. If you are looking into gains in the short term, position trading is not for you.
If you have ever heard of trading bots, that is just a fancy term for algorithmic trading. Here a computer software following a set of rules that are followed when a specific action occurs. Here a trader simply invests, sets limits, and lets the computer do the buying and selling for them. The upside is that you can sit and wait for your invested money to grow. And on the downside, you may need to be involved in trading for a while to use this style fully.
As you look into starting a trading career path, consider one of the four and set sail.
« Go Back to Articles