There are many methods and styles employed by online traders to trade. The categorization of these online trading styles can be done using many criteria such as the trading products, trading interval between buying and selling, methods/strategies used for trading, etc.
Based on the product traded in, online trading styles include options trading, options trading, futures trading, item trading, forex trading etc. Stock traders trade equities or shares from companies. Option traders trade options, which enable one to buy or sell a right at specific schedules under specific market conditions. Online futures traders and online item traders trade contracts; contracts for products like primitive oil and gas or contracts for treasury notes and bonds. Online forex traders trade currency twos, they buy one currency and sell another one according to exchange rate changes.
According to the interval between buying and selling of products online traders can be broadly classified in to short-term traders and long-term investors. Usually traders with trading interval less than twelve months are known as short-term investor and those with trading interval more than one year are known as long-term investors. Short-term investors, forms the majority of active traders, trade products according to short-term trends. They trade products usually according to its merits. Long-term investors trade with long-term goals; they normally are company/industry specialists want to buy growing fields. neonvent platform
Short-term trading can be further classified in to daytrading, swing trading and position trading. Online daytrading is the most active type of trading. Day traders’ trading interval does not is higher than one day. They purchase and sell products with in seconds, minutes or hours for usually small gains. Daytrading eliminates overnight risks. Daytrading involves scalpers — those purchase and sell great deal of shares/contracts with in seconds or minutes for really small per share gain, and momentum traders — trades according to the trend pattern of specific shares/contracts with in a day.
The buying and selling interval of online swing traders range from few hours to five days. They, like day traders, trade shares/contracts according to slight movement in price, but they are willing to hold their position until in the morning. Online swing trading involves overnight risks but have gain percentage higher than that of daytrading. Online position traders trade equities/contracts with an interval of days to months. They inform on long-term trends and company tasks. They have higher gain percentage and higher risks than online swing traders.
According to the strategies followed online trading can be classified in to Brother-in-law style -traders talk to brokers or other traders, Technical trading style- traders use advanced systems to find out trading trends, Economist trading style — traders inform upon economic prophecy, Scuttlebutt trading style — trading according to information produced from brokers or other sources, Value trading style — trading according to merits of individual stocks not to whole market, and Conscious trading style — combination of two or more of above styles to finding right opportunity.