1.Position trading involves taking a position aligned with the primary trend over a short to intermediate-term time frame, usually defined on a daily chart. To use the popular trading metaphor, the trend is your friend.
While various approaches can be employed, the core principle revolves around holding positions for several days or even weeks. This strategy capitalizes on major market movements and trends.
2.Swing trading is like position trading, but the swing trader would look to identify swings in both directions within the primary trend. Swing trading is typically done on a short-term basis, as opposed to an intermediate or longer-term time frame.
3.Day trading is simply trading within the day. The key characteristics of a day trader is that they open and close their open trading positions within the same trading day. This does not imply that day traders only execute one trade per day. In fact, most day traders have tactics where they buy and sell frequently throughout each trading day.
A key feature of day trading is to be “flat” at the end of the day. This means the day traders have closed out of all open positions before the end of the trading day. Day traders often use technical analysis as a key tool, employing technical indicators like RSI, MACD, and the Stochastic Oscillator, to help identify market conditions and assist with trading decisions.
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