Your Guide to Stock Trading: 4 Different Types of Stock Trades

Your Guide to Stock Trading: 4 Different Types of Stock Trades

You work for your money. Do you know how to make your money work for you?

There’s a way to get your money to grow without having to touch it. Have you considered investing your money in the stock market?

Over the last 70 years, stocks rose over 1,100 times. That’s not chump change!

Stock trades can be difficult to get into let alone master. Plus, you don’t want to play around with important funds like your retirement savings and lose it all.

Don’t feel intimidated. We’re going to walk you through four different types of stock trading to help you understand how it all works.

Know Why You Want to Get into Stock Trades

Before we break it all down, you’ll need to ask yourself a few questions. What is your ultimate goal for stock trading?

Do you want a nest egg for your golden years? Are you looking to turn some cash around quickly?

Do you just want a better understanding of the markets? Can you safely play with your money without losing too much?

Knowing what you want to get out of trading will help decide which of these four options you want to pursue. As is the case with everything, markets can be unpredictable so don’t invest money you don’t have.

Long-Term Trading

Don’t expect instant gratification from this type of trade. When you choose long-term trading, you’re in it to win it.

Because you’ll be holding on to these stocks for many months and even years, this type of trade involves a lot of analysis. You need to thoroughly examine the company you’re investing, past stock performance, and future predictions.

Medium-Term Trading

Medium-term stock trading lasts for several weeks or months. You won’t be holding onto these stocks for years but it still won’t be a same-day sale.

Look for patterns in stock behavior. Highs and lows can come in waves so you’ll want to get in on the bottom and ride the wave to the crest, then sell.

Short-Term Trading

Short-term trades can last a few days or can even last just a few minutes. As you can imagine, you have to have a keen sense of the market to master short term trading.

While potentially lucrative, short term trading is very risky. You have to develop a sense of timing and truly understand how the market works.

Try this out with a few penny stocks if you want to. This is one method best left to the professionals.

Day Trading

Speaking of professionals, day trading is squarely their realm. While interest in online investment is peaking with working adults, it’s hard to replicate what day traders do.

A good stock trader can explain call vs. put, pattern trading, arbitrage and more to help you understand where your money is going and how it’s growing.

Call on the professionals for this type of action-packed, complex trading.

Learn How to Manage Your Money

Managing your money is an essential skill to master if you want to be successful. Stock trades are one way to invest but as with anything financial, do your homework.

Want to learn more money management tips and tricks? Follow our financial blog for more info!

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