There are 5 types of traders out there, what type of trader are you?
The Day Trader
The Day trader looks for multiple daily trades and seeks to profit from small market movements. The Dat Trader is not interested in overnight risk and therefore closes almost all positions before the end of the trading day. The amount of trades in a day vary depending on strategy (Scalping would be more trades less time). Volatility is important for Day Trader and he seeks out opportunities when there are PR releases and Earning releases.
The Swing Trader
The Swing trader focuses on price action and trends and therefore looks for definitive trends and reversals in prices. News and earnings are less important to the Swing Trader, but they may or may not hold a stock during earning as there might be a bigger risk. The Swing Trader holds stock overnight and can hold it from anywhere to a couple of days to a couple of weeks.
The Technical Trader
The technical trader utilizes historical price trends and assumes that history normally repeats itself. Nw and earnings are not as important. For example if a stock gaps down because of bad earnings, he might look to buy at the key support area that is supposed by historical charts. The Technical trader is very mechanical and methodical in trading.
The Fundamental Trader
The Fundamental Trader analyses the value of the asset to determine if the stock is overvalued or undervalued and capitalize on them. Economic data, company earnings and research are important to the fundamental trader.
The Long Term Trader
The Long Term Trader utilizes a buy and hold strategy. Instead of putting money in a bank he will put it into the market to capitalize on a higher return that a bank’s interest may provide.
What Type of Trader are you?
Each type of trader has advantages and disadvantages but it’s important to understand what your goals are and what type of trading fits your personality. Ask yourself, What type of trader are you?