This website is all about trading, but what type of trading? Day trading, swing trading, position trading? We asked traders: which trading style do you prefer?
Which trading style do you prefer?
We ran a very informal poll on Twitter asking: Which trading style do you prefer?
This is the result:
Not surprisingly, swing trading is the most popular trading style.
Four types of trading styles
We can argue there are four main types of trading styles:
Scalping is the most aggressive form of trading, involving opening and closing positions within seconds or minutes to profit from very small price movements. This style of trading requires a high level of focus and discipline, as well as a deep understanding of market dynamics. We believe almost all scalpers lose money.
Day trading involves opening and closing positions within the same trading day. Day traders typically use technical analysis to identify short-term price movements and patterns. This style of trading is also fast-paced and requires a significant amount of time and attention. Day trading is a zero-sum game, and thus, it’s tough to make money. We day traded full-time for 18 years. We should know (we made decent money, but we witnessed many who failed).
Swing trading involves holding positions for several days or weeks to profit from intermediate-term price trends. Swing traders typically use a combination of technical and fundamental analysis to identify trading opportunities. This style of trading is less time-consuming than day trading, but still requires regular monitoring of the markets. We believe this is the most rational type of trading style, except for position trading:
Position trading is the most long-term form of trading, involving holding positions for months or even years. This is partially a “buy and hold” style. This style of trading requires the least amount of time and attention, but it is also the least liquid and can be more risky.
Here is a table that summarizes the key differences between the four trading styles:
|Trading style||Timeframe||Holding period|
|Scalping||Seconds to minutes||Very short|
|Swing trading||Days to weeks||Short to medium|
|Position trading||Months to years||Long|
The best way to trade is to use many types of trading styles. Trade different markets, time frames, and market directions. You want complementary styles and strategies!