Many people think that being a trader means you need to get in twelve hours of pure market action every day. But trading the markets doesn’t have to be your full-time job. That’s right. You can do other things too and still become a successful trader. To help you get a feel for what trading style might work for you, let’s look at some of the most popular ways of trading.
Common Trading Styles
Scalping
Scalping is about high-frequency trading, and we’re talking minute-by-minute here. Traders who trade this way will scour the market non-stop looking for a quick profit. In fact, they could probably enter and exit a trade in less time than it would take you to finish reading this article. This kind of trading is very time intensive. It’s a lot of research and, as I’m sure you can imagine, a lot of pressure. The goal here is to win little and often throughout the day.
Day Trading
Day traders, as the name suggests, are traders who open and exit trades on the same day. Typically, a day trader will decide at the beginning of the day which trades they will make and which direction they expect the markets to go. The goal here is to make a profit from short-term trends, and to make sure trades are not held overnight.
Swing Trading
Swing traders typically hold a position for a few days. The goal for many swing traders is to look for stable trends and to profit from slightly bigger price movements than you might see as a day trader. This type of trading requires good risk management skills, as keeping trades open overnight can be challenging. However, it is generally considered a nice option for part-time traders, as it is less time intensive than other trading styles.
Position Trading
Position trading means taking a long-term view of the markets. It involves holding a position over many days, weeks, months, or even years. Position traders need to make sure their trading and risk management strategy allows for more market volatility and bigger fluctuations in price. The goal here is to make a profit from long-term price trends.
Final Thoughts
As you can see, trading doesn’t need to be a full-time job. You can still keep your full-time job and do a little extra trading on the side. All you need to do is pick the right trading style for your time, lifestyle, and financial goals.
Looking to learn about forex trading? Check out our education section.
