Different Types of Stock Trading

Stock traders and stock investors are two different types of entities. Various strategies are used for different jobs.

Stock investors are bodies or individuals who use their own money to trade in the stock market to expect profitable returns.

Stock traders are bodies or individuals who take part in trading equity or security either for them or on behalf of other people.

Stock traders are usually professionals who take on buying and selling stocks to profit from short-term price unpredictability with transactions that range from a few hours to a few weeks.

 

They Are Anxious With The Following Mentioned Below:

 

1. Price Patterns: When a trader examines the past price movement to predict future prices, it is known as technical analysis.

 

2. Supply and demand: The trader keeps a close watch on all intra-day transactions to determine where the stock price is.

 

3. Market Emotion: Traders also play on the emotions of the investors by using techniques like fading.

 

4. Trader Support: A particular type of trader called market makers is hired to deliver liquidity through swift trading.

 

Approaches Of Trading In Equities:

 

Scalping: A trader who makes plenty of trades in a day and intends to scalp a partial amount of the profit from each trade by using the bid-ask spread

 

Technical Trading: These kinds of traders are trained to monitor graphs and charts closely to find the market trend and invest accordingly.

 

Fundamental Trading: This trading is based on fundamental analysis that considers corporate events like predictable or actual earnings reports, acquisitions, etc.

 

Swing Trading: The fundamental traders who stick to their positions for more than 24 hours are known as swing traders. To make a decent profit, they need to stick to the stock as any change in the corporate fundamentals usually takes some days to weeks.

 

Intra-day Trading: The share bought on a day needs to be sold or squared off within 3 pm on that day.

 

Momentum Trading: The traders who find a stock that is perpetually and considerably moving upward with a high volume. These traders trade on that to get a high profit.