This article incorporates all the important types of stock traders in the stock market with important information to analyse the right choice. The type of trader you choose to become depends on the preference and personality of the trader. There is a substantial role in your goals and expectations in choosing the right trading type. Now, let’s check out the available options.
1. Intraday Trader: An Intra-day trader is also known as a day trader and is referred to as an individual who purchases and sells a particular stock in a single day. Whether they earn profit or incur a loss, it happens quickly before the stock exchange closes for the day. The trading of stock happens multiple times in a day. You can hold the stock for minutes as well as hours multiple times in a day. It’s a volatile kind of trading and as a day trader, you need to be extremely fast. The intra-day traders are required to monitor the movements of the stock market quickly in order to make the right decisions. As a beginner, try not to engage in intra-day trading practices.
2. Swing Traders: These traders make a profit by capitalising their purchases on short-term stock trends as well as patterns. Swing traders make gains from shares purchased a few days ago. The period of holding stocks in this strategy is from 1 to 7 days. The traders apply technical analysis of trades to evaluate the movement and patterns of stock to execute the trade for a desirable outcome. The critical difference between swing and day traders is the period of holding the stocks.
3. Technical Traders: The traders who use technical market analysis tools comprise this category. The traders not just use tools but also their analytical skills to understand the variation in prices in the Indian stock market. The prices of specific stocks should be dependent upon the factors of demand and supply. Technical traders need to have a thorough understanding of stocks apart from exceptional researching capability to gain the position of technical traders.
4. Momentum Traders: The Momentum traders are the traders who use stock’s momentum which can be defined as the value movement of the stock in a specific direction. A momentum trader attempts to gain profit on such momentum by analysing the prospect of the stock breaking out or breaking out. When there is an upward movement, the trader sells the holding stock while obtaining above than average returns. In downward movement, the trader buys stock in bulk volume to make a sale when the price rises.