Different Ways to Trade or Invest in the Stock Market
I just want to show you the different varieties that you can actually put on for your trades or investments.
Trading based on Direction
The first way that you can trade is trade based on direction, when you’re trading based on direction there are two directions that you can trade. You can trade stocks to the upside or you can trade them to the downside.
If you trade stocks to the upside, you’re looking for a long or a bullish position, the reason they call it bullish is that bulls attack to the upside or long is you’re going to the upside and if you’re trading to the downside it’s a bearish position or typically a short position.
Because what you need to do is if you’re going to the long side maybe people understand the long direction because you buy a stock lower and you sell it at a higher price.
However, not everybody understands a bearish position or a short position, and the way that this works is you sell something at a higher price, let’s say 50 dollars per share and then you buy back at a lower price of let’s say 20 dollars per share.
So you borrowed these shares from a friend or your broker in this case and then you buy them back from market price, allowing you to make money on the difference of $30 per share.
The first way to trade is based on the direction and you can trade it either to the long or bullish side or to the downside or the bearish side which is the short position.
Trading based on time
The second way that you can do a trade is trade based on time and trading based on time allows you to define how big of an outlook you have and trading based on time, you can have a day trader or you have a swing trader.
Now you also have a long term investor there as well but these are the main two that in the trading community people define them as.
In the day trading world, you basically buy and sell a stock within 24 hours, it’s within a day, technically it’s 6 and a half hours because a trading day lasts 6 and a half hours.
A swing trader can hold a stock for multiple days, it could be 1 to 14 days, it could even be multiple months when you’re holding a stock for multiple months.
#trading #investing #stockmarket #waystotrade #tradingdifferent #howtotrade
Posted at: https://tradersfly.com/blog/different-ways-to-trade-or-invest-in-the-stock-market/
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