An informative article explaining the main types of trades.

The Four Main Types of Trade.jpg
Where investments are typically held for a period of years or even decades, traders buy and sell stocks, commodities, currency pairs and various other investment vehicles with the intention of generating returns that outperform a buy-and-hold strategy.
Trading profits are viewed as income since profits are “taken off the table” on a regular basis (as opposed to investing, where positions are generally left alone for the long haul).
Trading profits are achieved through buying low and selling high – and selling high and buying (to cover) low, in the case of short selling – and all trades are entered and exited within a relatively short period of time.
This time period can vary from a few seconds to months or even years, depending on the trader’s style. The following chart lists the four primary trading styles – position, swing, day and scalp – with the corresponding time frames and holding periods for each.

 

Type of Trades Time Frame Holding Period
Position Trading Long Term Months to years
Swing Trading Short Term Days to weeks
Day Trading Short term Day only – no overnight positions
Scalp Trading Very short term Seconds to minutes – no overnight positions

Read Article:  An informative article explaining the main types of investment trades.

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