Beginner’s Guide: Types of Traders and Trading

by khalid on 10/10/2011 · 0 comments

Investing in stock markets? Then you are surely going to come across the term Trading. It generally is referred to as buying and selling of stocks more so as an activity through which a stock is traded. There are different types of trading in the markets namely:

  • Day trading and
  •  Swing trading.

Day trading is referred to as buying and selling of shares on a daily basis. IT involves a trade where the trader doesn’t carry the shares to the next day after buying. He sells it off at any time before the end of the trading session on that particular day. It is also known as Intraday trading.

There are two types of day traders:

  • Scalp trading
  • Momentum trading

A scalp trader is on who buys and sells stocks at very low margins or profits and does multiple trades on a daily basis. Whereas Momentum Trader is one who identifies the trend and buys shares at bottom and sells at the high of the trend.

Swing Trading is a type of trading where the trader holds a particular script and sells it off within the next 4 to 5 trading sessions. This particular type of a trader trades basically on the basis of news, breakdown of technical indicators and the breakout levels.

Bell the Bull says: Investing and trading are different propositions, In case of an investor he holds the stock for a considerate period and looks at it as a long term investment opportunity whereas the Traders looks to make profits within a limited and short span of time.

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