Definition
Short-term trading is generally suitable for people who are happy to trading on a daily basis. These types of traders like to do as much as possible and as quickly as possible trading profit in a matter of hours. On the other hand, there are traders who prefer a long-term trading. Trader This type of trading is more varied, for example from day to day, week to week, month to month and even year to year.
Read : 5 Things to Consider Before trade
Time Constraints
Short-term trading is very time consuming because traders really need to keep an eye on market movements at all times. Every little movement in the market may indicate the emergence of a new trend.
Long term traders tend to ignore the daily factors and see the general idea. However this does not mean that you can ignore the daily trading. Long term trading is more of a precaution against profits that have been obtained from the previous trend.
Capital constraints
In the short-term trading, traders are faced with greater risks. If he had more to lose margins and increasingly have a financial burden, then he should win more often to make significant gains. While an obstacle for long term traders is to consider the cost of rollover and interest rates.
Tools of Trade (Trading Tools)
Short-term traders really should update the news or the latest data released. One example is the “nonfarm” short-term trading. Trading is often generate short-term lurches in the market if a little late great potential to destroy your trading. Short-term traders usually put trading positions before any news or data was released. This is a precaution against any secondary movements related to news or data.
Although it is not necessary constantly watching the news a growing, long-term trader also still have to look at technical analysis and the more weighty, especially fundamental factors such as the economic outlook in the long term, the pressure in the economy, and interest rates, and even other things like political cycle , Long term traders usually have a good knowledge of the history of the market, for example, any event that never caused significant upheaval in the macro conditions. He also learned from past experience how the market will turn around, or even out of a trend.
Read : 5 Things to Consider Before trade
Personality
Short-term trading usually have pressure and stress levels are high enough. Many short-term traders can be found at the stock exchange floor. Short-term traders should be able to take risks and most importantly, they must be able to remain calm under great pressure.
Long term traders need not worry about the amount of movement of the market from day to day. Long-term trading by itself even further from the pressure when compared with short-term trading. Trader dealing with the long-term sustainable market movements. For those who choose this type of trading, please note, not out of position when the trend seems to be slowing down because there would likely be a market correction.
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