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Trading Styles - Scalper, Day Trader, Swing Trader and Position Trader


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Trading styles refer to the different approaches that traders take in order to profit from the financial markets. There are four main types of trading styles: scalping, day trading, swing trading, and position trading.

Scalping is a very short-term trading style that involves taking small profits on a frequent basis. Scalpers aim to make a large number of trades over a short period of time, holding each trade for only a few seconds or minutes. They rely on high levels of liquidity and tight spreads in order to make small profits on each trade. Scalping is a high-stress and high-intensity trading style that is not suitable for everyone.

Day trading is another short-term trading style that involves taking positions in the markets and then closing them out at the end of the trading day. Day traders aim to capitalize on short-term price fluctuations and are generally not interested in holding positions overnight. Day trading requires a high level of discipline and the ability to make quick decisions based on real-time market conditions.

Swing trading is a medium-term trading style that involves taking positions in the markets and holding them for a few days or even a few weeks. Swing traders aim to capitalize on the intermediate-term price trends that occur in the markets. They may use a variety of technical and fundamental analysis tools to identify potential trades and make informed decisions.

Position trading is a long-term trading style that involves taking positions in the markets and holding them for an extended period of time, often for several months or even years. Position traders aim to capitalize on the long-term trends in the markets and are less concerned with the short-term price fluctuations. They may use a variety of tools, including fundamental analysis and market sentiment, to make their trading decisions.

In conclusion, there are four main types of trading styles: scalping, day trading, swing trading, and position trading. Each style has its own set of characteristics and requires a different approach to the markets. Traders should carefully consider their own goals, risk tolerance, and resources before deciding on a particular trading style.

Analyst Peter Mathers TradingLounge™ 

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14 minutes ago, tradinglounge said:

Trading styles refer to the different approaches that traders take in order to profit from the financial markets. There are four main types of trading styles: scalping, day trading, swing trading, and position trading.

Hi @tradinglounge

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Thanks for sharing. Great post!

 

 

All the best - MongiIG

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  • 5 months later...

Apologies for coming in late in replying to this.

Yes, interesting points. 

However, in my small effort toward a contribution I want to point out that most probably the personality of the trader might be a more determining factor on the trading style adopted, if not the determining factor, so much so that a trader might not really “choose” which strategy they will adopt, but they will be compelled to trade with the strategy that best fits their personality .

I have been interested in psychometric theories in relation to personality types for some time  now and I am somewhat familiar with the Big Five Personality Traits theory, of which a short intro can be seen here.

I know that according to the theory I have a high score in the trait "neuroticism" (I was tested) which to me justifies my approach to my trading style which corresponds to one of those described by @tradinglounge.

I am slightly disappointed that rarely I see anyone considering these ideas as I believe that it will be of great help to anyone approaching trading.

I think it would make a great topic of research, and my hypothesis is that it will show a clear correlation between the personality of the traders and their approach to trading.

Come on IG team, take it up, and you will then be able to offer a more personalised level of support to your clients.

This is an actual criticism of the level of support IG offers (I have been doing this long enough to feel I am entitled to voice some grudge), which I think it's too system centred, and not person centred enough.

I mean it's all well and nice to explain how the system, the markets, the approach to risk management and the trading styles might work.

But all that is only half of the picture, if that.

One’s personality is then what counts (again my hypothesis) in making a useful approach to a trading strategy.

Although the importance of the psychological factor is often mentioned in trading discussions, it remains an important topic which is dealt in a very vague manner.

There is nowadays scope for a more informed and, as I have already mentioned, person centred approached, backed up by well-established psychometric studies.

I offer some apologies to @tradinglounge for having somehow gone off the topic

 

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  • 2 weeks later...
  • 2 weeks later...

Thank you for the deeper dive into thought behaviour and the importance of knowing one's own thoughts and having the ability to change one's thoughts.
I think it was Buda that said, what you think, you become. What you feel you attract. What you image you create. I understand this very well as start meditation at 2AM to 4AM then my day starts.... 

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  • 3 weeks later...

Hi Folks, new member to IG and sorry to hijack this thread but I didn't want to start a new thread for a question!

I wanted to trade US30 on IG but i cannot find it anywhere so I am assuming its called something else.....Dow Jones Industrial average maybe?. Is anyone here trading US30 that can point me in the right direction

 

Edited by Fortycoats
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