All traders desire the same exact thing: PROFITS. However, each trader´s personal goals may change, which is why it is essential to find your trading style.
Your trading style should match your individual way of life so that you can achieve the best results possible.
“Why are you investing?”
“Are you trying to make a living off of trading?”
“Are you trying to build a profit for the future?”
“Do you want to make money in the short or long term?”
“How much time do you want or have to invest in trading?”
“Can you tolerate risks?”
One of the greatest mistakes new traders make is switching trading styles too fast whenever the market displays the first sign of trouble.
It is crucial to study each trading style and learn exactly which is suitable to you before getting started, instead of changing from one style to another to see what fits best, because doing that will guarantee you every losing streak.
Once you find out remain faithful to the style that better suits you.
There are four most common trading styles, which are scalping, day trading, swing trading, and position trading. The main difference between each style is the timing which trades are held.
· Scalping, trades are held for seconds and at the most a few minutes.
· Day Trading, trades are held from anywhere between a few seconds to a couple of hours within one day period.
· Swing Trading, trades are held for a few days or at least overnight.
· Position Trading, trades are held for a few days or even years.
“The first step to start trading is all mental. You need to set-up your expectations with what reality actually is. If you can start with this mindset of how to start to trade, you are putting yourself as a trader in a much more profitable place for long term success.” — Clay Trader
In this trading strategy traders profit off small price fluctuations in the least amount of time. It relies on technical analysis as candlestick charts and MACD. The trading mindset supposes small profits can quickly mount up into great profits and gains. It is performed intraday, or within a day period.
Anyone who wants to “Scalp” must have good emotional balance, be disciplined, and act as quickly as possible. Scalpers buy low and sell high, buy high and sell higher, buy low and sell lower.
This strategy is known for generating millionaires in a short period of time, but although it has happened these are isolated situations, no one should rely on that belief when deciding to day trade; Day trading can be dangerous if you do not know what you´re doing.
Day traders are focused on entering and closing a trade within a day period, they are usually instructed, experienced and well-funded, in other words, they know what they are doing, they have money and use it to make more money.
They utilize large volumes of leverage and short term trading strategies to gain on small price movements in highly liquid stocks or assets.
Keep in mind this is not for everyone because it involves great risks. To gain, day traders rely massively on the volatility of the market; they are drawn to stocks, assets, and digital currencies that move a lot throughout a day period.
This trading style is a longer term of the day trading style; it requires patience to wait for a trade and emotional stability to watch the market. Swing Traders hold their trades overnight. It attends to capture gains within a period of days or even weeks. Such trades use technical analysis, and some might use fundamental analysis.
Swing trading involves procuring trades that last from a few days to numerous months in order to profit. They are exposed to the overnight and weekend risks and looks for intermediate-term opportunities. It is the most popular active trading style.
Traders rely entirely on technical analysis to simplify the trading process. The main difference between day trading and swing trading is the holding time; Swing traders hold a trade at least overnight, while day traders make sure to finish or close a trade before the market closes.
This strategy holds a position for the long-term. Traders that use this style are not concerned with short term volatilities and the daily news unless it affects their trades in the big picture. They do not trade actively and make very few trades throughout the year. They Buy and hold, usually for years.
To trade this style one must be patient and not emotional; it requires the skill to disregard popular opinions.
When you choose trading styles that fit you, your chances of being a profitable trader is much higher, simply because you have chosen to operate in a way that you are comfortable with, where your emotions do not lead you, and so you will make less bad decisions, and more profitable ones.
There are several great platforms like Youtube you can use to help start trading and define your trader style and how to get started in trading, just do not take trading as an easy task and please, I repeat please do not quit your day job before learning everything you will need to prepare to start trading, there is an initial pain. No pain no gain.
Choosing a trading style can be hard for beginners, so here are some tips:
· Find a mentor;
· Take an investor risk profile test;
· Build a solid foundation (mentally and monetarily) before getting started;
· Learn and experiment different setups;
· Have a trading plan;
We wish you the best of tradings….
You might want to read “Can you handle day trading like a champ?”
Disclaimer: Our team works hard to bring you the best content in the cryptocurrency market, but it is only our point of view and not legal advice, and may be divergent from other opinions, so please do not make any decisions without concluding studies of your own to understand the profit possibilities and uncertainties involved at your own risk.