“The sky is the limit” a famous quote that is true for traders as the world of trading has ample opportunities. Therefore, different trading styles can be applied to generate an extra income besides earning regularly. But it is equally important that we chose a trading style that meets our needs and preferences. It is said that selection depends on psychology also.
If you want to earn fixed returns, then options trading is a better choice instead of swing trading.
The choice of trading style depends on own psychology. Well, here is a list of a few trading styles:
Intraday trading: this is the most popular and practiced by the traders in the stock market. In this, the positions are squared off before the market closes. It is quite a risky trading as being a trader you can both earn and lose quickly. It is suitable for those who hardly care for fundamentals of the game or essentials for successful investors in long run. For money management, timing entries and exits and position sizing are more important. The traders always look for high returns and want to make higher ROIs as compared to another trading format. You can count it among the most aggressive trading style. It is important to understand the consistency and power of compound returns on a short-term basis to be a successful trader.
Swing Trading: there is a different timeframe in between intraday and swing. The swing traders do activities to predict short term fluctuations in prices of stock overnight so that the positions should last from day 1 to a few weeks. As compared to intraday, the leverage is quite low in swing trading. Because overnight risk is associated with such trading, therefore, brokers in the Indian stock market charge for SPAN and Exposure margins. It offers more power to hold positions for the long run and withstand overnight price movements while trying to earn high profits per trade.
Positional trading: this trading style mostly ignores minor short-term fluctuations, which are important for swing traders. Such trading includes lesser leverage as compared to swing. The timeframe is also high for each trade because the traders can anticipate a high price rise in the future. To hold positions in long run, they need to know activities going on in the company.
Options strategies: If you have clear objectives and calculations, then the option strategies are the best choice. It is quite hard to formulate the strategies, but after becoming proficient you can make your own strategies and implement them also. That is a reason that you will find only a few strategists in India.
Technical analysis trading: The trading activities involve technical analysis due to their diverse nature and various approaches to analyze demand and supply in the stock market. Till the time you have an idea of its application, you can become an intraday trader, swing, or positional trader.
So, this is a list of few trading styles in the stock market. Well, if you really want to know more, you can meet an expert. Aryatrading is a well-known platform that lets you earn profits with less investment.