Stock trading can be a good way to earn money that you won’t normally earn from a day job. If you are the type who is in it for the rush, you would also find it quite exciting. But just because you can refer to this industry as exciting does not in any way mean that it is something you can take lightly. Trading stocks is a very serious endeavor that requires the right attitude, mind set and a strong stomach. You can use it as part time business or a main source of income.
To get to know more about stock trading, here are three ways of buying and selling stocks for short term durations.
- Day Trading
As the term implies, day trading involves day to day buying and selling of stocks. In the morning, a day trader would buy some stocks and then sell them before the market closes. Of course, this is just a generalized and simplified way of looking at it. Some traders may opt to hold on to their stocks until the next day or for a longer time if the price is not yet good.
For many traders, this style is quite risky. But those who have mastered the art of fast trading are able to earn huge profits from it. For one to succeed in this kind of trading, you need to be very intelligent, critical, objective, and most of all, you have the time to devote or the alternate solution is to get access of best stock trading chat rooms. Day traders also never let their emotions get in the way of making smart and objective choices and decisions.
- Swing Trading
Swing trading, meanwhile, refers to the trading strategy where you normally hold your stocks for a couple of days but not longer than what the position traders do. Swing traders are able to earn profits by buying a strongly trending stock after it completes its period of consolidation and correction. The swing trader holds the stock for about 2 to 7 days to be able to sell it off and make a profit of 5 to 25 percent. In short, they “swing” with the flow of the market.
- Position Tradition
When you say position trading, you refer to a trading strategy wherein you hold an investment position for an extended period of time like days, weeks or even months. Among these three types, this style can be considered as the longest term. Because of this, if you are position trader, you don’t have to spend the entire day in front of the computer waiting for the next moment to unravel, but rather you wait for significant changes to take effect on the value of your stock.
In this style, you also get to use quality analysis tools for long term technical analysis. Combining technical and fundamental analysis can help evaluate trading opportunity. This option is perfect for those who want to augment their income but does not have the time of day to be in front of the computer 24/7.
Studying about stock trading should not end with this article. Get to know more about it by reading more resources, subscribing to online stock trading newsletters, and enrolling to a day trade course.