When the word trading is mentioned, it could be interpreted in two different ways but this interpretation is dependent on the listener’s exposure, background and also environmental factors. Trading in this context, refers to an individual, a group or a company who buys and sells financial instruments, examples are: stocks, crypto assets and many more.
As much as I would not like to speak for everyone, I also feel that, a large percentage of people who go into trading, do so because they want to make more money. The success you will be able to achieve as a trader is highly dependent on your ability to gather knowledge and effectively use the gathered knowledge to your advantage. In order to achieve success in trading, you need to apply certain factors that will help you, you need to be able to set proper goals, carry out a basic and extensive research, and carry out a proper planning and implementation strategy.
Classification of Traders.
There are different types of traders, we have the day traders, the swing traders and we also have the position traders. The classification of traders is dependent on the type of niche each trader has decided to stick to.
• The position traders: The position traders make use of technical analysis to make research on the most juicy offer available on stock trend, when they discover it, they enter the exit positions in the market and it is usually based on the discovered trends.
• Short term swing trading: when compared with position traders. Swing traders work for a shorter time frame. Swing traders usually do not hold stocks for more than few days as it looks out for sharp moves that could be uncovered by technical analysis. This trading strategy is usually carried out by experts.
• Day traders: These set of traders barely leave there stock for a day, they move in and move out stock value swiftly without a second thought, they waste no time in raising high hopes as they immediately make away with whatever profit they get on time.
You will not be a true trader if you have the constant habit of holding on to a stock because you claim loyalty to the stock. As important as it is for traders to understand how the economy works, it is also necessary that financial statements are read in order to understand the financial status of the company before purchase is made.