Popular Online Trading Styles
There are many methods and styles as used by online traders to trade. The categorization of these online trading styles can be done using many criteria such as the trading products, trading interval between buying and selling, methods/strategies used for trading, etc.
Based on the product bought and sold, online trading styles include trading and investing, options trading, futures trading, product trading, forex trading etc. Stock traders trade equities or shares from companies. Option traders trade options, which enable one to buy or sell a right at specific time periods under specific market conditions. Online futures traders and online product traders trade contracts; contracts for products like gross oil and propane or contracts for treasury notes and bonds. Online forex traders trade currency pairs, they buy one currency and sell another one according to exchange rate changes.
According to the interval between buying and selling of products online traders can be broadly classified in to short-term traders and long-term investors. Usually traders with trading interval less than 12 months are known as short-term dealer and those with trading interval more than one year are known as long-term investors. Short-term investors, forms the majority of active traders, trade products according to short-term trends etoro. They trade products usually according to its merits. Long-term investors trade with long-term goals; you should be company/industry specialists want to invest in growing fields.
Short-term trading can be further classified in to stock investing, swing trading and position trading. Online stock investing is the most active type of trading. Day traders' trading interval does not is greater than one day. They trade products with in seconds, minutes or hours for usually small gains. Stock investing eliminates overnight risks. Stock investing involves scalpers : those trade massive amount shares/contracts with in seconds or minutes for tiny per share gain, and momentum traders : trades according to the trend pattern of specific shares/contracts with in a day.
The buying and selling interval of online swing traders range from few hours to four or five days. They, like day traders, trade shares/contracts according to slight imbalances in price, but they are willing to hold their position until in the mail. Online swing trading involves overnight risks but have gain percentage higher than that of stock investing. Online position traders trade equities/contracts with an interval of days to months. They pass on on long-term trends and company activities. They have higher gain percentage and higher risks than online swing traders.
According to the strategies followed online trading can be classified in to Brother-in-law style -traders check with brokers or other traders, Technical trading style- traders use advanced systems to find out trading trends, Economist trading style : traders pass on upon economic estimations, Scuttlebutt trading style : trading according to information taken out from brokers or other sources, Value trading style : trading according to merits of individual stocks not to whole market, and Conscious trading style : combination of two or more of above styles to finding right opportunity.