Traditionally, we clock into our jobs at 9:00 a.m., work the whole day, and then go home after clocking out at 5:00 p.m. It’s predictable, stable, yet dull as well.

If you’re looking for a challenge and a thrilling time, then regular 9-to-5 jobs have got to go. Instead, turn your attention to trading stocks.

This can have high risks, but also huge rewards. Needless to say, it’ll always be an exciting time.

Interested in what’s out there? Then read on for the different types of traders to find out which one is best for you.

Day Traders

Day trading is the most well-known type of trading. As the name suggests, these traders complete transactions within the same trading day.

This means they can both buy and sell financial instruments, and they don’t hold positions overnight. In addition, it’s common to make multiple trades throughout the day.

Day trading is ideal for those who want to make money off of short-term price movements. It’s also great for those who have the ability to react quickly, as market fluctuations can be unpredictable. You’ll need a keen understanding of technical analysis too.

Swing Traders

Swing trading may be better for you if you don’t like the idea of rapid transactions. Here, you’ll positions for at least several days; in many cases, you may even hold positions for a few weeks.

The idea is to capture price swings or trends in the market. Of course, this isn’t possible to do all on your own, even if you have in-depth knowledge of the market. You’d use technical and fundamental analyses to identify potential entry and exit points.

Position Traders

For something that’s potentially very long-term, consider being a position trader. These investors hold positions for weeks, months, and sometimes years.

The point is to base your trades on fundamental analysis and macroeconomic factors. As far as trading strategies go, you’ll benefit from broader market trends.

Position trading is excellent for those who can be patient. You need to be able to make decisions based on cold, hard facts, rather than your emotions.

Scalpers

On the opposite end of the spectrum of position traders are scalpers. You’re probably familiar with this term, as it’s used for people who buy tickets to in-demand events, and then sell them for extremely high prices, as there’s lots of demand for them.

The same concept works here. Scalpers are extremely short-term traders who make very quick trades. You’ll hold positions for only seconds or minutes.

The goal is to profit from small price movements by making a high volume of trades. If you thrive on chaos, then you’ll feel right at home here.

Algorithmic Traders

Algorithmic traders are also known as quants. This is another type of trader whose name gives everything away; they use computer algorithms and automated trading systems to execute trades.

This means that you’ll need to have some digital know-how to be successful. You must use algorithms that are designed to identify and capitalize on market inefficiencies, price discrepancies, and other patterns.

Once you get past the hard part, trading should be relatively easy. You’ll enjoy a somewhat hands-off approach, as the algorithms and automated systems will do all the work for you.

High-Frequency Traders (HFT)

HFTs are technically a type of algorithmic trader. They’re similar to scalpers in that they execute a large number of trades in a short time frame. However, since they have the power of algorithms and automated trading systems on their side, they can do these in a matter of milliseconds.

With the aid of advanced technology and low-latency trading systems, you can quickly profit from tiny price differentials.

Arbitrageurs

Not a fan of taking risks? Then you should be an arbitrageur. This type of stock trading may take a little more time and patience to do, but it’ll all pay off, as you’ll lock in risk-free profits. This is possible through taking advantage of price discrepancies between different markets or financial instruments.

To do this, you’ll have to buy an asset at a lower price in one market. Simultaneously, you’ll need to sell it at a higher price in another market. The end result is an instant profit with no risks involved.

Event-Driven Traders

Those who always have their ear to the ground will thrive as event-driven traders. You’ll focus on trading around specific events that may affect market prices. These can be:

• Earnings reports
• Economic announcements
• Mergers
• Acquisitions

To make smart moves, you’ll need to analyze the potential impact of these events on asset prices. From there, you can make trades accordingly.

Technical Traders

Technical traders base their trades on technical analyses. You’ll have to study historical price charts, patterns, and indicators. These can all help you predict future price movements.

Fundamental Traders

Fundamental traders operate similarly to technical traders, but instead of technical analyses, they do fundamental ones. Study up on the financial health and performance of companies, as well as economies and industries.

Other factors you need to consider include earnings, revenue, growth prospects, and macroeconomic trends.

Quantitative Traders

Math nerds will enjoy being quantitative traders. As you might’ve guessed, you’ll use both mathematical and statistical models to make your trading decisions.

The fun part is you’ll develop and test trading strategies based on historical data and market patterns.

Retail Traders

If you want to trade with your own personal funds, then become a retail trader. This is the route usually taken by individuals who don’t want to do large-scale trading.

There are online brokerage platforms that allow you to try out the various trading styles we’ve listed above, such as day trading. Before you start though, it’s beneficial to try something like My Investing Club to get vital tips that’ll prevent significant financial loss.

Join These Types of Traders

Now that you’ve learned about the different types of traders, it’s time to see which works for your personal style and comfort.

You don’t need to stick to only one type either. As you familiarize yourself with the markets, feel free to jump to another trade type to see if it fits you better.

Check out the rest of our blog page for more about finance.