This article delves into the various types of trading strategies available in the market, providing insights into day trading, swing trading, short-term trading, trend following, BTST, positional and long-term trading.
Table of Contents
Different types of trading are as follows:
Day Trading
- Involves buying in the morning and selling before market close
- Requires quick decision-making and a systematic approach
- Selectivity is important to avoid gambling or addiction
Swing Trading
- Lasts from one to five days or one to seven days
- Allows managing trades alongside other responsibilities
- Requires checking prices a few times a day or hour
Short-term Trading
- Lasts from 15 days to three months
- Can be done in cash or futures
Trend Following
- No specific time frame; depends on market trends
- Can last from a few days to weeks or months
- Relies on following trends using tools like moving averages or price action
BTST (Buy Today, Sell Tomorrow)
- Involves spread trading between two consecutive days
- Requires less screen time and can be completed within a short timeframe
Positional Trading
- Mainly done in stocks and futures with a long-term view
- Holds positions for 2-3 months or longer
Long-term Trading
- Involves buying and holding investments for a year or more
- Requires periodic review of positions to mitigate risks
Choosing the Right Trading Approach
| Types of Trading | Timeframe | Recommended Charts |
| Day Trading | Intraday | 5-minute and 15-minute charts |
| Swing Trading | 1-5 days or 1-7 days | 60-minute and daily charts |
| Trend Following | Variable | Daily or weekly charts (depends on the system used) |
| BTST | 2 consecutive days | Hourly and daily charts |
| Positional Trading | 2-3 months or longer | Weekly charts |
| Long-term Trading | 1 year or more | Monthly charts |
Considerations for Choosing the right types of trading
- Available time for trading
- Desired income generation
- Existing commitments (job, business, etc.)
- Access to charts and software
It is important to have a clear understanding of the selected trading approach and its associated strategies before entering the market. Regular reviews of positions and adherence to risk management principles are crucial for successful trading.
See: Role of Broking firms in Stock market
