Trading Styles
There isn't a single trading strategy that outperforms the rest.
The amount of time you want to stay in a trade, the timing of your entry, and occasionally the frequency of the trades distinguish the trading methods.
There are four main styles of trading:
- 1.Scalping
- 2.Day trading
- 3.Swing trading
- 4.Position trading
The difference between the styles is based on the length of time that trades are held for.
- Scalping trades are only held for a few seconds, or at most a few minutes.
- Day trading trades are held for anywhere from a few seconds to a couple of hours.
- Swing trading trades are usually held for a few days.
- Position trading trades are held for anywhere from a few days to several years.
The table below provides typical timeframes for the different types of trading styles.
Timeframe | Scalper | Intraday | Swing | Position |
|---|---|---|---|---|
1 Minute | X | | | |
5 Minute | X | X | | |
15 Minute | | X | | |
30 Minute | | X | | |
1 Hour | | X | X | |
4 Hour | | X | X | |
1 Day | | | X | X |
1 Week | | | X | X |
1 Month | | | | X |
New traders may find it challenging to select their trading style, but doing so is essential to their long-term success as traders.
Changing trading techniques (and trading systems) at the first indication of difficulty is one of the biggest mistakes.
Changing your trading style or method frequently is a guaranteed way to lose all of your money.
Once you become comfortable with a certain trading approach, stick with it; in the long run, it will reward you for your persistence.
When choosing a trading strategy, it's important to be adaptable enough to recognize when a strategy isn't working for you. You also need to be consistent enough to remain with the strategy even when it's not working.
Last modified 11mo ago