| There are a number of stock market trading styles | | | | generally how bubbles grow, due to many traders |
| that different kind of traders use. There is no best | | | | jumping onto an accelerating stock. Investing period |
| kind of style, but each is suited to a trader's needs | | | | for momentum trading is around a day. |
| and situation. The following are a few of the styles | | | | Swing Trading |
| that are common in the market. There are generally | | | | The general time frame for swing trading is one to |
| four primary stock market trading styles. These are | | | | four days. This is most common among mom and |
| swing trading, trend trading, momentum trading and | | | | dad investors. Stocks are often chosen on the basis |
| scalping. | | | | of technical analysis. Swing traders generally have the |
| Choosing which style you wish to use depends on | | | | advantage of not having too much competition form |
| your situation. An investor's time frame is the main | | | | major traders. Technical analysis I used to looked for |
| aspect to look at when deciding which style is best | | | | indicators of short term price movements. Swing |
| for them. The correct pairing of trading style and | | | | traders rarely do any fundamental analysis as they |
| pairing will ensure you are profitable in your efforts in | | | | are looking for short term fluctuations. The majority |
| the stock market. This ranges from the aggressive | | | | of their decisions are based on price trends and |
| day traders to the conservative long-term-investors. | | | | patterns. |
| Scalping | | | | Trend Trading |
| Scalping are trades that are done (bought and sold) | | | | The time frame for trend traders is around a month. |
| during a very short period of time. This can mean | | | | This looks at a securities' long-term momentum |
| that a buy and sell in just a matter of minutes. Each | | | | direction. As investors are holding the stock for |
| trade makes very small margins but a trader | | | | longer there is a greater deal of risk involved. It is |
| generally would make many transactions in a day. | | | | wise for trend traders to do fundamental and |
| Scalpers, usually aim for high volume stocks which are | | | | technical analysis on the stock. The main indicators |
| liquid. They try to buy on daily lows and sell | | | | that trend traders look for are higher highs. This |
| immediately when the stock goes up. It is also a | | | | indicates that a stock is trending upward. |
| good method for investors who do not have a lot of | | | | It is very important for a trader to choose the |
| capital and reuse their capital n every trade. | | | | correct style of trading depending on their time |
| Momentum Trading | | | | frame. Each requires a totally different kind of |
| Momentum trading is when a trader sees a stock | | | | analysis and each style of trader will have a different |
| price picking up and joins it. The investor will take a | | | | set of securities in their portfolio. There are risks |
| short or long position in the stock anticipating that | | | | associated with all styles with Trend Trading being |
| the momentum of the stock will continue. This is | | | | the riskiest and Scalping being the safest. |