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Types Of Traders: Day, Stock, Forex, Stock Market And Brokers
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Published: October 10, 2007
The types of traders are as diverse as the dealings that happen daily in the world of stock market or stock exchanges, where Forex (foreign exchange), risks, options, or derivatives are but common words. Different traders perform specific tasks, all of which are greatly contributory to the success of stock exchanges or the stock market.
A specific trader must have specific characteristics and capabilities for him/her to perform the many duties that are required in the profession. In a world where snappy and sound judgment calls are often needed, it is crucial to find a trader who knows what to do when dire situations arise.
Here's a comprehensive list of the different types of traders (in no particular order):
1. Day traders. They perform daily buying and selling activities. They buy and sell financial instruments such as derivatives, stocks, currencies, or options. Their undertakings begin and end within a single trading day; hence, they are known as "day traders." Since the job happens within one trading day, they are required to spend their time fully. A day trader can seize daily movements within the stock market unlike with other types of traders. The risks that come with their jobs are paid off by potentials for bigger returns on a daily basis.
Day traders are further subdivided into two categories: institutional and individual. Institutional day traders are employed by large financial institutions and have a greater pool of resources at hand. They can access critical tools and equipment such as modern analytical software, large fund inflows, leverage and capital, and straight access to data centers and stock exchanges, among others. These "add-ons" figure greatly in the success rate of lowering the risks that are associated with day trading as well as in forestalling the competing day traders.
Individual day traders, on the other hand, do business on their own. Therefore, they have limited resources to help them with their job. They generally trade using capitals from loans, private individuals, or their own pockets. They are legally prohibited to trade a large number of people's money and are not allowed to advertise as financial managers or advisors in some places like the U.S. At present, almost all individual day traders employ direct access brokers who give rapid and straight access to various stock exchanges aside from providing better platforms for trading.
2. Position Traders. They buy or sell contacts and then keep them for a certain duration. They have very huge potentials of seizing large profits as weeks or months pass.
3. Discretionary Traders. They, as their name suggest, rely generally on their discretion or personal judgment. They are highly flexible and can adapt to evolving conditions that happen in the stock market.
4. Systematic Traders. They are the exact opposites of discretionary traders. They are highly methodical and careful and follow strict rules when they go on with their tradings.
5. Swing Traders. They are always on the lookout for quick "return of investments." They hold positions for a day to a week at most, in search for profits.
Sources:
"Day Trader." Wikipedia. 24 Sept. 2007. 08 Oct. 2007. http://en.wikipedia.org/wiki/Day_trader
"Types of Traders." 08 Oct. 2007. http://members.cox.net/forexus/newpage1.htm
Van Bergen, Jason. "Introduction to Types of Trading: Swing Traders." Investopedia. 2007. 08 Oct 2007
http://www.investopedia.com/articles/trading/02/ 101602.asp
Here's a comprehensive list of the different types of traders (in no particular order):
1. Day traders. They perform daily buying and selling activities. They buy and sell financial instruments such as derivatives, stocks, currencies, or options. Their undertakings begin and end within a single trading day; hence, they are known as "day traders." Since the job happens within one trading day, they are required to spend their time fully. A day trader can seize daily movements within the stock market unlike with other types of traders. The risks that come with their jobs are paid off by potentials for bigger returns on a daily basis.
Day traders are further subdivided into two categories: institutional and individual. Institutional day traders are employed by large financial institutions and have a greater pool of resources at hand. They can access critical tools and equipment such as modern analytical software, large fund inflows, leverage and capital, and straight access to data centers and stock exchanges, among others. These "add-ons" figure greatly in the success rate of lowering the risks that are associated with day trading as well as in forestalling the competing day traders.
Individual day traders, on the other hand, do business on their own. Therefore, they have limited resources to help them with their job. They generally trade using capitals from loans, private individuals, or their own pockets. They are legally prohibited to trade a large number of people's money and are not allowed to advertise as financial managers or advisors in some places like the U.S. At present, almost all individual day traders employ direct access brokers who give rapid and straight access to various stock exchanges aside from providing better platforms for trading.
2. Position Traders. They buy or sell contacts and then keep them for a certain duration. They have very huge potentials of seizing large profits as weeks or months pass.
3. Discretionary Traders. They, as their name suggest, rely generally on their discretion or personal judgment. They are highly flexible and can adapt to evolving conditions that happen in the stock market.
4. Systematic Traders. They are the exact opposites of discretionary traders. They are highly methodical and careful and follow strict rules when they go on with their tradings.
5. Swing Traders. They are always on the lookout for quick "return of investments." They hold positions for a day to a week at most, in search for profits.
Sources:
"Day Trader." Wikipedia. 24 Sept. 2007. 08 Oct. 2007. http://en.wikipedia.org/wiki/Day_trader
"Types of Traders." 08 Oct. 2007. http://members.cox.net/forexus/newpage1.htm
Van Bergen, Jason. "Introduction to Types of Trading: Swing Traders." Investopedia. 2007. 08 Oct 2007
http://www.investopedia.com/articles/trading/02/ 101602.asp
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