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:
- 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.
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.