Which type of stock trader are you?
You buy and sell stocks so that makes you a stock trader. But which type of trader are you?
The type of stock trader you are determines the kind of stocks you buy, the time frame you trade, and the period you buy and sell. The "KNISPO Guide to Stock Trading" site divides stock traders into the following four types.
Scalper
- Holds stocks for seconds to minutes
- Buys 1000's of shares but only makes a couple of cents per trade
- Is looking for the difference between the bid and asked to make a profit
- Could trade more than 100 times a day
- Needs extremely good data
- Likely prefers to be on the floor of the exchange
Day Trader
- Holds stocks for minutes to hours
- Uses interday and daily charts to make buying decisions
- Needs real time data
- Is looking for large interday moves
- Could trade more than 10 times a day
- Needs strict risk control strategies
Swing Trader
- Holds stocks for days to weeks
- Could trade more than 10 times a week
- Uses interday and daily charts to make buying decisions
- Is looking for large moves over a short period of time
- Needs risk control strategies
- Can use real time or end of day data
Position Trader
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- Holds stocks for weeks to months
- Could trade more than 10 times a month
- Uses daily or weekly charts to make buying decisions
- Is looking for large moves over a long period
- Needs risk control strategies
- Generally, uses end of day data
The next level is an investor. Investors are not traders but some people who are traders may think they are investors.
Investor
- Holds stocks for months to years
- Uses daily or weekly charts to make buying decisions, although many may not use charts at all
- Likely buys or sells less than 10 stocks a year
- Is looking for large moves over a long time period
- Spends a lot of time researching stocks prior to making any buying or selling decisions
- Likely sells when the fundamentals change
Source: KNISPO
Scalper, day trader, swing trader, position trader or investor — which type are you? Vote in the poll or join the discussion in the Types of Stock Traders — Which Type Are You? thread.
Browse more related posts in the Stock and Forex Trading Forum of PinoyMoneyTalk.
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