If you want to dabble yourself seriously into the business of trading than you need to first determine the trading style that best suits your personality. There are basically three trading styles: 1) Day Trading, 2) Swing Trading and 3) Position Trading!
In day trading, a trader opens a trade and closes it before the end of the day looking for quick profits by taking advantage of volatility in the market. Day trading is for you if you have the time to sit in front of your computer monitoring the market on a daily basis.
As a day trader, you will have to spend hours sitting in front of your computer monitoring different charts looking for the right opportune time to make a killing. 90% of the people who try day trading tire themselves within months and give it up finding it too stressful.No doubt, it can be tiring and stressful for an inexperienced trader to sit in front of the computer looking for the right time. This wait can become very long and fatiguing!
But this doesn’t mean that day trading is not popular. Many people do it successfully by trading different markets like stocks, forex, futures, commodities, ETFs and even options. Day trading is best suited for risk takers and action oriented personalities who love monitoring the markets for hours on a daily basis.
On the other hand, in swing trading, a trader looks for a trend that can last from a few days to a few weeks and tries to ride it at an early stage till such time the profit targets are met. Swing traders are most trend riders.
As a swing trader, you don’t have to monitor the market for hours everyday. Just 30 minutes to one hour will be enough for a good swing trader to know when is the best time to place a trade. When you open a trade, you leave it open with proper stops and go to other work whatever you want to do. Just monitor your trade eaveryday for 30 minutes to see how it is going. After placing the stops, you are all set and free. The market will take it’s own course. If it moves in the right direction, your profit target will be met. If it moves in a wrong direction, the stop will close your trade before you lose too much.
So you can see, day trading is a serious business. Many people think that can take it as a hobby. It is not a hobby infact it is just like a job. For people who have regular jobs, swing trading is the best option. They only need 30 minutes each day to monitor their trade and move th stops in accordance with the daily price action. Whateven trading style you choose, make sure it matches your personality and psychology!