Choose the Right Style of Trading

The day, an investor decides to step into the world of stock markets and begins trading

, is indeed an important financial milestone for him. Once, an important decision is taken; he has to choose a right style of trading. It is quite possible that most newcomers may not be familiar or aware of the existence of these styles. It is required that an investor becomes aware of these styles.

Primarily, there are three trading styles Day trading, Swing trading and Trend trading. Usually, day traders follow each and every movement of the market, and profit from split second fluctuations too! Neither they have any loyalties towards any particular sector or company nor do they follow a trend. Each day, for them, is like a fresh slate. As such, they do not hold any security overnight, regardless of the fact whether they make profit or loss. Swing traders hold securities for about a week or so and aim at profit from short term trends of the security. In contrast, Trend traders hold security for several weeks or maybe for even months depending upon their own assessment of intrinsic value of the stocks.

Investors are required to examine various key factors when they decide about their trading strategy or choose their trading style. First and foremost, they should take into consideration that how much free time is available to them to monitor and analyze the movement of stocks and corresponding market data. If he does not have enough time to spare; he should adopt trend trading style, whereby he buys certain stocks and sticks to them until they reach their true intrinsic value. Day trading, on the other hand, requires much more time and commitment.

Thus, the stock market provides investors with tremendous opportunities to make money by choosing right style of trading.

Choose the Right Style of Trading

By: Nikhil Shah

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