What Are Trading and Investing Styles for the Stock Market? - Candlestick Patterns Explained by TechniTrader®

Trading and Investing Styles List with Descriptions

Your Trading Style will dictate which financial trading instrument you should use. Most traders do not have a well-defined Trading Style OR they are attempting to use a Trading Style that is unsuitable to their personalities, goals, capital base, education, and experience.

The Primary Trading Styles are listed below:

Intraday Trading:

This is the fastest-paced Trading Style, and it requires the highest skill level in terms of Chart Analysis, Technical Analysis, Risk Assessment, Order Calculation and Execution, Money Management, and Self-Discipline. Professional-level education, extensive experience over many years, and thousands of trades are necessary for consistent success with Intraday Trading. It is not for Beginners and Intermediate-Level Traders because this Trading Style is the most demanding in time and commitment.

It also requires professional-grade computer equipment, execution software, and a large capital base. Intraday is the highest-risk Trading Style. Typical lot sizes are 5,000–50,000. This Trading Style group also includes High Frequency Traders (HFTs).

Day Trading:

This very fast-paced Trading Style requires high skill levels in Chart Analysis, Technical Analysis, Risk Assessment, Order Calculation and Execution, Money Management, and Self-Discipline. This Trading Style requires advanced-level education and many years of experience with hundreds to thousands of trades.

It is not recommended for Beginners and traders with limited experience.

Day Trading requires near professional-grade computer equipment and execution software and a moderate to large capital base, and it is a high-risk Trading Style. Typical lot sizes are 1,000–10,000.

Velocity aka Momentum Trading:

This fast-paced Trading Style requires moderate to high skill levels in Chart Analysis, Technical Analysis, Risk Assessment, Order Calculation and Execution, Money Management, and Self-Discipline. With sufficient simulator trading experience, Intermediate to Novice-Level Traders can succeed with this Trading Style. A minimum of a 2–3-monitor computer system linked to a fast and reliable execution system is sufficient, and a moderate capital base is also sufficient. It is a moderately high-risk Trading Style. Typical lot sizes are 1,000–10,000.

Swing Trading:

This is a moderately fast Trading Style which requires moderately high skill levels in Chart Analysis, Technical Analysis, Risk Assessment, Order Calculation and Execution, Money Management, and Self-Discipline. With sufficient simulator trading experience, Intermediate to Novice-Level Traders can succeed with this Trading Style. A minimum of a 2-monitor computer system linked to a reliable execution system is sufficient. Swing Trading requires sufficient capital to trade 500–5,000 shares at a time.

Position Trading:

This is the lowest-risk and easiest short-term Trading Style to learn. It is suited for Beginners to Advanced Traders and for traders with limited time or time constraints.

A moderate skill level of Chart Analysis, Technical Analysis, Financial Analysis, Institutional Holdings Analysis, Growth Analysis, Risk Assessment, Order Calculation and Execution, Money Management, and Self-Discipline is adequate for this Trading Style.

It requires a low to moderate capital base with average lots ranging from 100–5,000 shares. This is a low-risk Trading Style.

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Trade Wisely,

Martha Stokes CMT

Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses