Different Types of Trading

[dementyia 10]

I am learning a lot here, but some of the terms confuse me, even though I have heard them a lot in my day to day life.

 

For example, what makes a person a day trader as opposed to some other sort of trader or stock investor. What all different names are their for those who invest in stocks, futures, and bonds, and what are the differences between the types of investor please?

 

Thanks bunches!

[Head2k 10]

Why dont you try Wikipedia or Google for this basic stuff? Or some book? I dont think that many people here would like to write pages of posts about something which you can easily find yourself. Especially when it is a topic for a whole book.

[Soultrader 12]

A day trader is typically someone who does not hold a position overnight. A day trader may be in and out of a stock/contract in seconds, minutes, or hours... but will usually stay flat into the close. Hence the term "day" trader.

 

A swing trader is one that holds positions overnight on a short-term basis. This can range anywhere from 1 day to 2 weeks.

 

An investor typically plans to hold on to a stock/contract on a much longer timeframe. An investor may rely more on fundamentals, will diversify, and looks to hold for months to years.

 

One of the key differences is a technical vs fundamental approach. A scalper (who is the shortest timeframe day trader) does not care what a company's P/E ratio or balance sheet looks like... he may simply be reading order flow or tape. The usual day trader who plans on holding for minutes to hours may be relying on support and resistance levels... technical analysis. A swing trader as well may be relying on a mixture of technicals and fundamentals.

 

For more info, it is best you pick up an intro book on finance or trading. You can find 100's of pages alone on this topic. Good luck!

[dementyia 10]

I'm sorry if I offended, but I don't even know the terms to look up to even begin researching appropriately. I'm learning a lot here though, and I think that shortly I will have enough terms and basic info to actually do a search (and thorough research) that will prove worthwhile instead of just waste my time with false information that I wouldn't know was false by looking due to my personal inexperience in these matters..

 

Why dont you try Wikipedia or Google for this basic stuff? Or some book? I dont think that many people here would like to write pages of posts about something which you can easily find yourself. Especially when it is a topic for a whole book.

[dementyia 10]

Soultrader, thanks so much, this was exactly the leaping-off point I needed to start my own research!

 

I'll be on my way to paper-trading (?-that's the pretend trading on a simulator, right?) in no time at all. *smile*

[Head2k 10]

I'm sorry if I offended, but I don't even know the terms to look up to even begin researching appropriately. I'm learning a lot here though, and I think that shortly I will have enough terms and basic info to actually do a search (and thorough research) that will prove worthwhile instead of just waste my time with false information that I wouldn't know was false by looking due to my personal inexperience in these matters..

You didn't offend at all. I just wrote what I thought.

I think in the beginning you will not be able to recognize "false" information anyway, because you have nothing to base your judgement on, so just don't bother with that and read everything you can. But always think about what you read and take everything with a grain of salt. As you gain experience you will be able to distinguish more what seems logical to you and what not.

[dementyia 10]

Thanks for the advice. *smile*