Getting to Know the Four Active Trading Styles
Trading is an activity of buying and selling to achieve profit based on the difference of price movement on the chart. Traders can trade actively using short-term charts or small timeframes. The mindset that deals with active trading are different from long-term “buy-and-hold” trading. Traders who do long-term trading strategies override short-term price movements and only target long-term pricing. Instead of active traders believe short-term movements and gain market trends is a moment of profit.
There are four active trading styles that we know and the discussion we will share in two articles. Each type of active trading has specific market conditions and their respective risks. After reading this article, you can find out what your trading style has been.
Daily trading is the most traded style of trading. In fact, it becomes another name of the active trading itself. Day Trading is a method of buying and selling on the same day. The position opened today must be closed today and no positions are held overnight or overnight. Many professional traders are adopting this trading style. But with the trading online trading style is also open for beginner traders.
This trading style is usually done by experienced traders. Trend trading uses large timeframe charts, daily to monthly charts, combined with other methods to determine the direction of market trends.
This trading style can last for days or it could be a week or longer depending on the trend. Traders will pay attention to the surge of higher highs or lower highs to determine the trend of a pair. After knowing the trend wave then the trader will take advantage of price movement up and down.
Traders with this trading style only determine the direction of the market and do not try to predict entry, stop or target levels. They are trading until the trend is over. When there is a high market fluctuation, the trading trend is more difficult and the position will be reduced.
When a trend is over or over, a trader with a trading swing style will enter the market. There is usually a price fluctuation at the end of the trend as a sign of buyer and seller battles to dominate the market and may be the beginning of a new trend. Swing trading usually has a position held more than a day but faster than the trading trend.
Swing Trading usually has trading rules based on technical and fundamental analysis. This trading rule to identify the right timing to buy or sell. The swing trading setup does not have to predict exactly the peak and valley position of the pair price movement but swing trading is in dire need of price movement in one direction. Price movements in a narrow range or sideways are unsuitable and risky for a swing trader.
Scalping is the most active strategy for active traders. This trading style is among the fastest and only takes small but often and many advantages. Utilize a small price change and immediately liquidate if profit has been achieved. Scalper, the trader’s name with scalping trading style, usually avoids large price fluctuations and when trading volumes are large. A scalper also requires a very liquid market for the frequency of the transaction becomes more. Scalper principle, small but frequent and many advantages.
The difference with swing traders is that scalpers prefer quiet, stable markets and do not want to surprise price fluctuations like news releases. Including the goal is to remove the spreads are already considered to provide benefits.
But keep in mind and watch out that the risk of scalping is also great because once the market moves in different directions, traders must strictly anticipate risks. Do not let the profits that have been in the can of many trades, erased only with one big loss.
Scalping is usually done in the early Asian markets and or in the American market in the second session. If converted at Western Indonesia time is 1 to 3 hours of dawn. We’ve covered scalping in the previous article series.
Well, live you want to apply which style of trading? Or during this time, you apply what style of trading?