While it’s true there is no right or wrong way to trade, some types of trading can be better suited for particular personality types. The same can be said about your preferred trading timeline and how long it takes you to make decisions. At Cobra Trading, we believe that people should be able to trade their way, on their time.
Some of our clients are full-time traders. They spend their days analyzing the market, collecting data, and placing trades whenever they see fit. But that’s not the reality for all-day traders. Some people have full-time jobs or other obligations, so they don’t have the luxury of spending as much time following the stock market. However, that doesn’t mean that they cannot be successful at trading.
In reality, trading is a possibility even if you only have time to do so on the weekends or during your lunch breaks. You just have to adjust your trading style to accommodate the time slots you have available.
There are three types of trading that you can do: swing trading, day trading, and scalping. Let’s see if any of them are right for you.
This style is perfect for those who have a very limited amount of time to trade. It works best for traders who can only do it in 5-10-minute increments.
Scalpers get in and work fast. They often enter and exit the trade within a minute or two. They typically focus on what’s happening in the market right in front of them as opposed to trying to decipher the big picture.
This style of trading is also great for those who don’t like to hold a position for too long. Being in longer trades requires a lot of patience and discipline, and some people prefer to shorten the period their money is in the market.
Day trading is a pretty vague way to describe one’s trading habits. Technically, even scalping falls under the classic description of day trading, but as a very narrow niche within it.
Traditional day trading is great for people who have a lot of time on their hands. Trades take as little time as several minutes or as much time as several hours. And while there are some highly effective automation options available, classic day trading often involves spending your time in front of a screen and tracking your position constantly.
But you don’t need to spend all day in front of the computer. Some people trade during the particular hours that they have available. For example, you can enter the trade premarket and finalize it during the early hours. All you need is a few hours of uninterrupted time.
We’ve posted an extensive article on swing trading talking about how it differs from traditional day trading. To reiterate, it usually takes longer, allowing trades to last multiple days or even weeks. It also requires very little supervision. This style is ideal for those who have very little time to trade. You can check the market over the weekend, see if any setups would work well for your trading strategy, and enter. Most traders check in on their position once in a while or simply let their automation strategy take care of the rest.
So consider what type of trader you are best suited to be. We all have different personalities, a different amount of time on our hands, and a choice pace. Make sure your preferred trading type accommodates your timeline.
Narrowing down and focusing on a specific style also lets you double down on your education. The more specific you are with your strategy, the faster it may become profitable for you.
If you need any help deciding on a trading style or have any questions, please reach out to us via phone, e-mail, or live chat. Our goal is to create an easy and friendly experience to help you be the trader you would like to be.