Trading, also known as TOL (for the oldest), consists in the purchase and sale of financial instruments with the help of the internet. The main advantages of online trading are the lower commissions, the wide range of tools with which to operate and the countless brokers and platforms have completely replaced the old methods in which one went directly to the stock exchange to carry out every purchase and sale operation.
Anyone can trade the markets, here is a brief description:
– Institutional entities: they generally have large amounts of capital (banks, investment funds, hedge funds, states);
– Retail entities: generally they are private entities or other small funds that operate with their own capital;
Needless to say, those who move the markets are not us retail investors and traders but the large institutional entities that in some cases also control 97% of the entire market, if you want to learn more about this, take a look at my other article:
Once you understand this and how to recognize whales you will understand that it will be useless to swim against them but to indulge them and swim with them!
Depending on the type of operation, the following can be identified:
TYPES OF TRADERS
Discretionary traders, who make operational decisions without the aid of automatic systems, relying solely on their analytical skills;
Semi-discretionary (or semi-automatic) traders, who assist the analysis process with automatic elements (falls into the Larry Williams category);
Quant trader (or quantitative trader or systematic trader or automatic trader), whose strategies are based on quantitative analyzes derived from mathematical computations;
TYPES OF TRADING
Another classification that can be made concerns the time horizon of its operations:
Scalpers, whose positions are usually opened and closed in a period of time that can be a few seconds or minutes;
Day traders, who differ from scalpers both for the lower number of transactions and for the usually longer average time to market (per single trade);
Multiday trader (or swing trader), with a time horizon of more than 24 hours;
Position trader, whose strategies contemplate a time to market per single transaction which tends to exceed 30 days.
CONSIDERATIONS
I started as a discretionary trader studying technical analysis, I moved on to options and now I operate in a systematic way. I have tried them all and after a lot of experience I can tell you that if you want to be profitable in trading you have to study a lot and know what to do. As far as I’m concerned, options and systematic trading are the best ways to approach you.