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Day trading is one of the options you can consider for being financially independent. However, a coin has two sides, and so does trading. It has its share of advantages and disadvantages. Though trading might provide you with huge rewards, you also have to be aware of the risks associated with it.
You just have to spend only a few hours every day in day trading to earn money. However, if you want to become a strong and successful person in trading, you need to understand completely how the market works. To do this, you have to know the different types of strategies involved in day trading. Warrior Trading is one such online education platform that provides you with various types of trading styles. Let us explore them in detail.
How Does Warrior Trading Help Day Traders?
You can find that Warrior Trading provides trading styles that are used by day traders quite often. So, what do you do in day trading? Here, you have to search for short-term opportunities in the market, ranging from just five minutes to a couple of hours. You cannot purchase a stock and keep it as a long-term investment in your portfolio.
In day trading, you need to find a stock whose price is increasing. Then you can buy that stock at a lower price and sell it when the price is higher. This way you can earn good profits in a short period. How does Warrior Trading help here? It teaches you different trading styles that you can use in day trading and concentrates majorly on scalable techniques and strategies that you can learn and use with your small trading account. You can then adapt these strategies when your account expands due to your increased success in trading.
What are the Different Types of Trading that Warrior Trading Offers?
Warrior Trading offers different types of trading as given below:
- Momentum Trading
- Scalp Trading
- Swing Trading
What is Momentum Trading According to Warrior Trading?
If you want to do day trading effectively, momentum trading is your go-to option. Even Warrior Trading feels that this trading is more efficient and is also the commonly used one. In momentum trading, you have to find a stock, whose price is on the rise. This is nothing but you can buy the stocks at a lower price and while selling, you can do so at a higher price.
Momentum trading is all about purchasing a stock and selling it based on its latest strength of price trends. During every single market day, you can find that the stock has the potential to increase 20% to 30%. You must understand that a healthy momentum trading style involves spotting the right price moves that have strong support which will help the stocks to have a price increase without variations for a continuous period of time. Once you spot such a stock, ensure you grab it immediately and enjoy profits until you feel that the prices are about to drop.
What is Scalp Trading According to Warrior Trading?
You might often confuse momentum trading with scalp trading as both are very similar. There is only a thin difference between both of them. However, according to Warrior Trading, momentum trading and scalp trading have a reasonable amount of difference practically.
The initial process is the same in both. You have to find a stock that has a price increase within a short span of time. However, when it comes to execution, in scalp trading, you have to secure your profits quickly from stocks that have a price increase. Whereas in momentum trading, you can secure the maximum potential profits that you can get from your stock in a day.
In simple terms, when you do scalp trading, you can simply look out for stock and earn profits when its price increases lightly. You can search for similar stocks in a day. While in momentum trading, you can find stocks that can provide you with maximum profits in a daily price move. This means that you can retain the stock for half an hour to a few hours.
What is Swing Trading According to Warrior Trading?
According to Warrior Trading, swing trading differs slightly from momentum trading and scalp trading. Since, in both momentum and scalp trading, you jump into action and see profits in a day. Sometimes, you may earn profits within seconds, minutes, or hours.
Swing trading is also used by people who wish to implement short-term trading strategies. Here, you can try and earn profit from stocks whose price increase can occur overnight, or a few weeks down the lane.
When you do swing trading, you have to find stocks that have the possibility of a price increase due to some identifiable event including a positive earnings release from the organization, the announcement regarding the launch of a new product, or an event having the potential to benefit their business. This might be the announcement of fresh government rules, or a new market opening.
You can consider the following example: A pharmaceutical company has researched a new type of drug, and if the Food and Drug Administration Department is on the verge of approving it, that company’s stock has the potential for a price increase to a great extent.
What is Position Trading According to Warrior Trading?
You can consider position trading as a buy-and-hold. Though this trading isn’t actually a day trading strategy, you can use its basic technique in a day trading environment.
In position trading, you have to find stocks that you can retain for an extended period ranging from a few days to even a couple of months or years. Once you find this stock, you can set your position goals. The goal can be to reach a particular price for a constant period. After you reach this goal, you can close your investments.
While in momentum trading and scalp trading, you look for profits within a short period of time, in position trading, you need not be concerned about the everyday profits or losses. Here, your role is similar to an investor. You can retain the stocks for a longer period and then sell them and reap benefits.
Wrapping Up
Day trading can make you financially independent provided you know all the ins and outs of the market and the way it works. There are different types of trading, and you can opt for the one that you find comfortable and enjoy your profits.
