There are so many ways to trade – choosing a way can take forever.
Broadly speaking, the forms of trading include positional, swing and day trading:
Most investors through investment banks, pension funds and mutual funds have their savings with positional traders. Positional trading takes the longer term view and is, if not exclusively, based on fundamental information.
Swing trading, on the other hand, is broadly considered to be trades that take a few days to a few weeks to complete and can be a mix of fundamental and technical.
Day-trading, by simple definition, is a trade that is completed before the end of a day. It is based on technical information only. I prefer the term ‘short-term’ trader.
Some years ago I started with positional trading, fundamental information and how to read financial reports. I then moved onto swing trading and used a combination of fundamental and technical.
It was only more recently, a couple of years, I made a slow transition over to short-term trading and now find myself exclusively in this area of trading.
Within each of the above broad categories there are a limitless number of styles, methods and systems to choose from. It is indeed a minefield.
Many starting out go straight for the ‘day-trading’ category of trading and most don’t last long. If fundamental information is not their bag, then newbie’s should at least start with swing trading. Taking the medium term view. Its more stable than short-term trading simply because of the effect that short-term news has on price and therefore the chart.
Swing trading can be profitable for the part-time trader, day trading however is only for the full timers.