How Does Your Trading Style Fit You?
One of the most crucial questions a new trader can ask themselves is, “How do I start trading stocks? What trading style should I use?”
This question directly relates to how much enjoyment you will obtain from your new trading endeavor. It is also crucial for your long term success to utilize a trading style that fits you.
First let’s define the primary trading styles based on time a trade is held. Scalping, Day Trading, Swing Trading, and Long Term Trading are the four main styles. In the second part of this discussion, we’ll look at how your personality and trading goals fit with these different trading styles.
Scalping: For Professionals Only
The quickest time frame is ruled by scalpers. These hyperactive video gaming types utilize micro time frames, sometimes trading over 1000 times a day for miniscule profits and losses each trade.
Scalpers are normally tape readers, meaning they are making trading decisions based on order flow. By order flow, I mean the type of stocks that are trading, and the aggressiveness with which traders are trading them as revealed by trading volume, among other factors. Scalpers use a lot of esoteric toolsâ€”