There are many different trading styles that are prevalent in the trading world that all offer their own special benefits and differences that appeal to all different trading personalities and risk profiles. This is a main attraction the the marketplace as a whole, because you as an independent trader are able to pick and choose the specific method and style of trading that suits your personality in the best way possible.
EVERY TRADER MUST KNOW THYSELF!
The Day Trader typically is in and out of a position in the same day, and often times will buy and sell the same underlying multiple times during the day. This style of trading is most suitable for people who prefer high intensity trades and have a large appetite for risk. The day trader often prefers a lot of action and is the type of person who has a large amount of time to allocate to trading because day trading requires intense focus in front of the trading screens when positions are active.
The Swing Trader will hold a position for a couple days all the way up to several weeks and prefers a more moderate intensity style of trading. Swing trading is the most common realm that many independent options traders fall into and is a style that allows the trader to take a daily hands-off approach yet still offers very rewarding profit potential. It is much less rigorous than day trading and is a feasible style for trading stock and index option spreads. Swing trading is the best method for getting people in the market who do not have a lot of money to trade with.
The Position Trader will put on a trade with the intention of holding it for several months or even years. This type of trading style is most suitable for individuals with a low appetite for risk, has a small amount of time to allocate to trading, and desires a lower intensity of trading. The goal of the position trader is to aim for a profit with as little risk as possible and is the realm where professional traders and market makers often operate making it a cater to suitable for investors with larger capital.
Choosing a trading style requires the vigilance and resilience to know when it is not working for you, but also requires the discipline and consistency to stick with the right trading style even when it is not performing optimally. One of the biggest mistakes that new traders often make is they change trading styles and systems at the first sign of trouble. Constantly changing your trading style or trading system is a sure way to catch every losing streak. Once you are comfortable with a particular trading style, remain faithful to it, and it will reward you for your loyalty in the long run. Always keep good trading records and stick to your trading plan and strategy.
BE FAITHFUL TO YOUR TRADING STYLE!