While all traders want the same thing, they practice different methods to get it. Let’s review some examples of popular trading types:
Day trading
This method involves conducting multiple trades throughout the day and trying to profit from short-term price movements. Day traders spend a lot of time staring at computer screens, and they usually just close all of their trades by the end of each day.
Scalping
This day-trading strategy is becoming popular lately. Scalping attempts to make substantial profits on small price changes, and it’s often referred to as “picking up pennies in front of a steamroller.” Scalping focuses on extremely short-term trading, and it’s based on the idea that making small profits repeatedly limits risks and creates advantages for traders. Scalpers can make dozens—or even hundreds—of trades in one day.
Swing trading
This type of trade tries to take advantage of the natural “swing” of the price cycles. Swing traders try to spot the beginning of a specific price movement, and enter the trade then. They hold on until the movement dies out, and take the profit. Swing traders try to see the big picture without constantly monitoring their computer screen. For example, swing traders can open a trading position and hold it open for weeks or even months until they reach the desired result.