Many people who become interested in trading are first introduced to the financial markets through investing.The purpose of investing is to build wealth slowly over time. This is typically accomplished through a buy-and-hold approach: making investments such as in a stock, ETF or mutual fund and allowing price to fluctuate over time. Investors “ride out” the inevitable downtrends with the expectation that prices will eventually rebound and rise over the long term.
After years or decades, the investment will, in many cases, increase in value and provide positive returns for the investor. Long-term returns can be further amplified by compounding through the reinvestment of profits and dividends. Investments are often viewed as a means of building wealth to provide stability and income during the retirement years.
Traders use a variety of different strategies when identifying and capitalizing on opportunities in the market. Some traders prefer to enter and exit trades within a single day, while others hold onto positions for weeks or months. If you’re just getting started, Trade Winx Trading for Beginners Course will teach you everything you need to know to get started. You’ll learn market terminology, how to identify trends, and even build your own trading system.
Trading Time Frames
While investments are typically held for a period of years or even decades, traders buy and sell stocks, commodities, currency pairs and various other investment vehicles with the intention of generating returns that outperform a buy-and-hold strategy. Trading profits are viewed as income since profits are “taken off the table” on a regular basis (as opposed to investing, where positions are generally left alone for the long haul).
Trading profits are achieved through buying low and selling high – and selling high and buying (to cover) low, in the case of short selling – and all trades are entered and exited within a relatively short period of time. This time period can vary from a few seconds to months or even years, depending on the trader’s style. The following chart lists the four primary Trading Styles – Position, Swing, Day and Scalp – with the corresponding time frames and holding periods for each.
Based on duration of stock holding, the different types of stock trading can be classified and discussed below. You can read the complete article here, just click on the link below to read full article –