People in the stock market is comprise of many kinds of traders depending on their preference and comfort. A trader is different from an investor mainly because of length of time for the position they hold.
Position Trader: A position trader will usually keep trade open for a few weeks. These traders look for undervalued stocks that show potential for change and hope to either sell the stock when its price is relatively high or buy the stock while it is cheap.
Swing Trader: Swing traders seldom keep position open for more than few days. Because of this, they are required to trade with a larger volume of money than a position trader would.This is due to the fact that the stocks purchased may not change in price as much as a position might that was held for longer. In order to net a profit after commissions and fees are added to their trade, trades should involve at least enough to cover commissions and fees after the trade is completed.
Day Trader: Day traders take swing trading one step further by keeping positions open for less than a day. They very rarely keep trades open overnight. In order to make enough money to make a trade worthwhile, very large amounts of money are needed in order to make a profit.
No comments:
Post a Comment