Day trading is becoming increasingly popular among those seeking financial freedom and independence. Trading the markets promises high returns, but it also carries a significant level of risk.
The beauty of day trading, in theory, is that by working the markets, a person can acquire riches in just a few hours per day. However, becoming a great day trader requires knowing the markets, how they move, and how to capitalize on those fluctuations.
That is why it is critical to understand the many types of trading techniques employed by day traders and to choose which ones perform best for you. To assist you in this, Warrior Trading has created a quick guide to trading styles. Here it is.
Warrior Trading focuses on what form of trading?
Warrior Trading focuses on day traders’ most prevalent trading styles. Unlike purchasing a stock to maintain in your portfolio for years, day trading is all about identifying short-term market opportunities—often for only five minutes or a few hours.
The goal of day trading is to discover a stock that is rising and then capitalize on that movement by buying low and selling high.
Warrior Trading teaches a variety of trading approaches for day traders, with a focus on scalable methods—strategies that can be studied and applied with a modest trading account and then changed as your account rises in size and trading success increases.
How does Warrior Trading describe momentum trading?
Momentum trading is the most popular—and, according to many Warrior Trading gurus, effective—method for day trading. Momentum trading, like practically every other sort of trading strategy (with the exception of short selling, which we will not discuss here), is picking a stock whose price is rising—buying cheap and selling high. Momentum trading is the practice of purchasing and selling stocks based on the strength of recent market patterns.
During practically every single market trading day, a stock can fluctuate 20% to 30%. A solid momentum trading strategy will detect price moves with enough force to sustain upward movement for an extended length of time. When they come across one of these jewels, the momentum trader seizes the opportunity and rides the wave until they believe it will subside.
How does the platform describe scalp trading?
Momentum trading and scalping are quite similar and sometimes misconstrued because, technically, there is only a minor difference—in principle—between the two. However, when it comes to Warrior Trading, there is a significant difference in practice and execution.
Both need the trader to discover a security with a short-term price increase. The practical distinction is that scalpers seek to bank very quick gains from an upward-moving stock, whereas momentum traders seek to bank the largest gain possible from the stock in a single day.
As a result, scalp traders tend to set lower price goals. Scalp traders only desire a small piece of the upward-moving action and may attempt to discover numerous rapid trades every day (lasting as short as a few seconds or minutes). Momentum traders, on the other hand, seek to maximize their gains from a daily price move. That could imply holding the stock for anywhere from a half hour to many hours.
How does it explain swing trading?
While momentum and scalp trading are true day-trading methods because the action and execution occur all in one day (and sometimes in seconds, minutes, or hours), swing trading differs, according to Warrior Trading. Swing trading is still a popular trading technique among those seeking to adopt short-term trading strategies, so understanding how it works is beneficial.
A swing trade is when a trader attempts to profit from a stock move that may occur overnight or several weeks later.
Swing traders look for stocks that have the potential to rise in price as a result of a specific event, such as a positive earnings release from the company, the announcement of a promising new product, or a geopolitical event that may benefit their business.
For example, if the FDA is going to approve a new type of drug developed by a pharmaceutical company, the business’s stock is likely to rise—perhaps drastically.
To uncover a successful swing trade candidate, traders must sniff out news or detect a trend that is likely to move a stock or sector.
How does Warrior Trading explain position trading?
How does Warrior Trading describe position trading?
Position trading is also known as “buy-and-hold.” As such, it isn’t truly a day-trading strategy, but it’s important to grasp what it is and how it works because the fundamental concept may be applied in a day-trading context.
Position trading is the identification of a stock to hold for an extended period of time. Once the stock has been identified, position traders establish their position objectives. When the goal has been met, position traders withdraw their investments.
While momentum traders and scalpers seek short-term price activity, position traders are less concerned with price movement or daily gains or losses. They behave more like investors, holding for an extended period of time before selling to profit from long-term, often large variations in the stock price. It entails committing funds for the long term.
Momentum trading, scalping, swing trading, and position trading—Warrior Trading suggests learning all of the types available to traders and developing a system that works for them.
