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Foreword
There are three basic strategies when it comes to trading—Day trading, Swing Trading, and Long-term investing. Understanding what they are, and their difference allows you to invest and trade wisely. In this article, I will walk you through what they are and give you easy-to-be-understood examples so that you can have a better understanding of them.
Day Trading
Day trading is buying and selling stocks (or other securities) within a trading day. Day traders trade stocks depend on their liquidity and whether it is hot or not. Most of the time, they rarely rely on fundamental analysis before they jump into the market. Technical analysis is their tool when it comes to day trading. Support, resistance, indicators, and patterns are what they utilized the most.
If you are looking for a quick reward, day trading would be the best choice. It offers you opportunities to capture profit from moves in short periods. However, it might destroy your portfolio easily when you haven’t received well-rounded education yet.
I strongly recommend joining Warrior Trading’s lessons when you are starting from scratch to learn stock trading. Warrior Trading is an online trading education team that provides extensive courses, trading tools, and community support. They cater to both beginning and experienced stock traders. Their courses cover different trading savvy as well as their trading strategies that are proved profitable and successful.
You could check him out on Youtube by searching Ross Cameron or Warrior Trading.
Warrior Trading Youtube Channel: https://www.youtube.com/user/DaytradeWarrior
Warrior Trading Pro bundle: https://www.warriortrading.com/trading-courses/
Swing Trading
Swing trading is to buy and hold stocks (or other securities) over short period, few days to several weeks. Most of the time, swing traders rely on both fundamental and technical analysis. They would go through news, annual reports, quarterly reports to make predictions on a particular stock quote.
Same as day trading, swing trading also offers you opportunities to capture profit from moves in a short period. However, it might also destroy your portfolio easily when you haven’t received well-rounded education yet.
The Humbled trader is both a swing trader and a day trader. She posts FREE educational videos and vlogs on YouTube and her website regularly. She also offers subscriptions to her community on her website. Subscribers could access her premium training videos, her stock watchlist, and her Discord live chat room. Her videos cover her trading psychology, mindset, and trading strategies.
Humbled Trader Website: https://community.humbledtrader.com/a/44383/PW7qQMyk
Humbled Trader Community: https://community.humbledtrader.com/store?ref=https%3A%2F%2Fcommunity.humbledtrader.com%2Fa%2F43426%2FPW7qQMyk
Humbled Trader Youtube Channel: https://www.youtube.com/channel/UCcIvNGMBSQWwo1v3n-ZRBCw
Long Term Investing
Long-term investing is the practice of buying and holding securities for a long time. Long-term investors invest in stocks depends on the growth potential of the company and the sector. Most of the time, investors rely on fundamental analysis heavily when they are investing. They would go over annual reports, news, sector outlook before investing any stock.
In contrast, long-term investing has a higher risk when comparing to day-trade and swing-trade due to their difference in the time of risk exposure. The longer time you put your money in the market, the higher the risk you are facing. However, its risk-reward ratio follows suit at the same time. Same as day trading and swing trading, long-term investing would be dangerous when building your portfolio if you haven’t received well-rounded education yet.
“Trade like a stock market wizard” is one of those good books that teach long-term investing. Mark Minervini, the writer, illustrates his method to profit from long-term investing. His strategy is to buy undervalued stocks which have tremendous growth potential and sell them when the growth rate of the stock becomes relatively slow.
Final Thought
Day trading, Swing Trading, and Long-term investing are the three basic trading strategies when talking about stock trading. You are to understand their difference before you start trading with real money.
[Next Lesson: Pros and Cons of the three basic trading strategies.]
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