Trade Styles

Trade Styles

The major difference between trading styles is based on how long you want to stay in your trade.

Daily Close often referred to as (End of Day)

This popular trading style works great for people who don’t have much time to trade or analyze markets on a daily or weekly basis. One of the great perks is being able to have more free time and still have an edge in the markets. This style is also great for people who take set and forget setups in the markets. We will talk more about the different setups you can take in later chapters.

Fundamental (Macro Trade Trends)

Combing fundamental information and/or financial models to value the strength or weakness of a stock, currency, market, or country to anticipate future supply and demand. With experience you may develop an edge and connect information other people can’t. This gives you an edge. One of my styles is capturing volatility over a monthly macro timeframe.

Intraday Trading

This is a trader who makes developed a system to open and close multiple positions during the same day. These “day-traders” often focus more on technical trading and price action. Intraday trading takes on many forms. There is scalping, event trading, swing trading, Trend Trading, and many more below.

Event Trading

Event Traders tend to Specialize in ‘Red News’ events and trade during, or around the announcement of an important news release. Extreme volatility can occur if a surprise figure is released (which is not widely anticipated by the markets) which creates opportunity to make more profit over a very short period of time. However longer-term moves may also unfold after an important event which may get the interest of Macro Traders to trade on the longer term trend, however Event Trading typically relates to short-term events.

Scalping

Scalping is a form of intraday trading, and unlike the other styles, you must stay glued to your screen as if your life depends on it.

While it is an extremely popular form of trading due to the higher potential for profits, it is also one of the harder styles to master as it requires a lot more discipline from the trader. Despite this last point, scalping typically attracts the most interest from newer traders. Newer traders would be better off starting from the higher timeframes in a top down approach before attempting scalping.

Swing trading

As a Swing Trader you are hunting big moves. Popular timeframes are to enter on the daily chart, and hold a position for days, weeks, or even months. The 4h-1h can be used to scale and guide in your entrys for the swing trade. Used in combination with Trend Trading, this style of trading makes for a deadly combo. This is one of my most profitable styles.

Technical trading

Analyze, enter, manage and exit their trading using Technical Analysis. This can be performed on any timeframe, and are more popular on intraday timeframes, however Technical Analysis can also be used for long-term forecasting.

Trend Trading

The object here is to identify a trend and only trade in the same direction as the suspected trend. Traditionally trends traders were associated with long-term fund managers, however in reality you can become a trend trader on any time-frame you choose as all time-frames trend.

Sentiment Trading

Trading opposite of the masses and holding a contrarian view to the markets. Can be a very profitable trading style to combine with because when sentiment is at extremes. Large trends and big moves are more likely to form.