Whats real trading type then…. Dear Readers !!, trading involves various types, in which the trader can commit you various profit ratios based on your equity invested. But we shall discuss here only long term and short term trading cycle and the medium term trading cycle.
To start with we shall first define who is a trader? The simple answer is anyone can be a trader, you can be a trader too, subject to you have deep knowledge of Financial Market you are trading into! A trader is one who know the financial in and outs of a particular market and who trades the following commodities/cash segment/shares/bonds/currencies , of that segment as the trader knows the ups and downs of the segment.
Long Term Trading !
Long Term trading is a trading cycle designed by the trader after his analysis and research on the particular segment of financial market, to incur profits in the cycle which involves trading duration of 180 to 360 days. Normally in such long term trading cycles, the aim of the trader is to keep the risk ratio at low and stable profit returns. Normally the long term duration may be 180 days or 360 days of trading cycle. The trader carries out buy/sell transactions in various financial segments based on his/her expertise. Profits to the investor are realized at the end of the trading cycle. Normally the profits are stable in such cycles as trader gets enough trading space to even recover losses if made.
Short Term Trading !
Short Term trading is a trading cycle designed by the trader after his analysis and research on the particular segment of financial market, to incur profits in the cycle which involves trading duration of 30 to 60 days. In this period the trader takes a high risk as his duration of trading is low and aim to target the profit is max. In such trading cycle, the risk is higher, so shall the profit margin too. Normally such trading is evolved out by trading the news of the economic releases which indicates a particular uni directional move to the trader which allows the trader to focus on short term trading plan.Normally the profits are very high in such cycles as trader takes a high risk and high investment call. Kindly note, the higher is the demand of profit, the higher should be the acceptability of losses by the investor in such short term cycles.
Medium Term Trading Cycle !
Normally most of the traders count medium term as a summation of 45 trading days of conservative trading in the financial markets, and provide a trading plan to the investor. The trader trades and accumulates the profits or losses within a period of 45 trading days and the investor gets the payout post 45th day. This is a general trading pattern followed by retail traders. Normally this is the choice of the most investors.
Before deciding to participate in the Financial market, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, do not invest money you cannot afford to lose.