There are numerous methods and styles used by traders to trade.
The classification of these trading styles can be done using various measures such as the products trading, buying and selling interval and methods/schemes used for trading. According to the products traded, the major trading types include stock trading, options trading, forex trading, commodity trading, futures trading, etc.
Stock trading involves the trading of equities or shares of companies via specific stock markets. Option trading involves trading of options, which is the right to buy or sell a share/contract at precise time periods under specific market levels. Online forex trading involves the trading of currencies in pairs; that is buying one currency and selling another one according to currency exchange rate changes.
Online commodity trading and online futures trading involve the trading of contracts; either for products like crude oil and natural gas or for money investments like bonds and treasury notes. Based on the time between purchasing and selling of products online trading can be generally divided in to long-term investing and short-term trading.
Usually trades with buying and selling gap below one year are called short-term trades and those with buying and selling interval over one year are called long-term investing. The majority of online traders are short-term traders, trade equities/contracts in relation to short-term changes in value.
Long-term traders trade according to company/industry growth rates. They are generally company/industry specialists, trade in large quantities with long-term goals. Short-term trading can be divided in to day trading, swing trading and position trading. Day trading is regarded as the most active trading style.
In Day trading the buying and selling period does not exceeds one day. Day traders buy and sell stocks/contracts with in seconds, minutes or hours for generally small gains. Day trading avoids overnight risks as the trader holds no stock/option. Day traders include: (1) Scalpers