Types of Stock Market Traders

The type of trading you will participate in will determine the trading tools you acquire. High-risk, rapid trading may persuade you to thoroughly  sharpen your understanding of the market. Not only will you need an awareness of analysts’ projections but you’ll need to do your own in-depth research as well. The following types of traders vary in the amount of time they hold stocks in the market and how adept they are at applying fundamental and technical analysis.

Position Traders

Position traders use technical analysis to determine the most favorable stock trends. Based on those trends, position traders enter and exit positions in the market. The amount of time they hold those positions varies from a few days to months, even as long as a year or more.

Short-term Swing Traders

Short-term swing traders use technical analysis to make rapid moves in the market. They rarely hold stocks for more than a few days. They seek to take advantage of short-term opportunities. This requires extensive understanding of the inner workings of the markets and excellent analysis capabilities.

Day Traders

Day traders never leave their money in stocks overnight. They always cash out. They change position in a matter of hours, minutes or even seconds. It may be hard to fathom but day traders enter and exit trading positions sometimes more than a hundred times in a single day. It’s high-risk trading. We can give them credit for keeping the market moving.