Trading Styles Overview
Learn what kinds of styles traders are using and how to pick one for yourself. This article describes the trading styles on Guides in brief.
A trading style determines how often you will place trades and how long you will keep them open for. Experienced traders often combine styles to trade in both the long and short term.
The guides in this group break down the most popular trading styles. You can see which ones gel with you the best, then check out the ways Cryptowatch can help you play that style.
Here's a look at the four major styles covered in these guides:
Trading Style | What is it? | Timeframe | Objective |
Scalping | Profiting from frequent, tiny price changes. Extremely active. | Super short — minutes or seconds | Accrue many small profits at a very high rate. |
Day Trading | Multiple trades throughout the day, very active. | Short — minutes, sometimes hours | Capitalize on market events that occur intraday, eg. breakouts |
Swing Trading | Medium frequency trading that follows prevailing trends. | Medium — days to weeks | Take positions on mid-to-long-term trends, close when the trend reverses |
Position Trading | Low frequency, long-term investments | Long — weeks to month | Typically making long trades (buy low sell high) with assets that show long-term growth. |
Day Trading, Swing Trading and Position Trading guides coming soon!
Picking a trading style can help you break away from negative habits like trading on emotion and chasing losses. It can also help focus your efforts by defining your trading goals.
It’s important to look at your goals and your personality objectively as possible — being realistic about your risks and abilities now can save you (and your account) a lot of heartache in the future.
When determining your style, you should consider:
- Your account size / “risk capital” (money you can afford to lose trading)
- Your risk tolerance
- The amount of time you can commit to trading
- How much you know/need to learn about trading
For example, a brand new trader might determine that:
- They have a small amount of risk capital, and are cautious with it
- They would prefer minimal risk
- They have a limited amount of time to commit to trading
- They need to devote part of their trading day to study and analysis
The trader in this example might decide to start one of the lower-intensity styles, like position or swing trading. Both styles usually require days, weeks or months before the trader takes profit on their positions, allowing ample time to devote to study and practice.
This is not financial advice. Investing and trading in crypto assets is high risk and not suitable for every consumer. The value of crypto assets may go down or up. As many crypto products and markets are unregulated, you may not be protected by government compensation and/or regulatory protection schemes. You should be prepared to lose money if something goes wrong.