The stock market offers a ton of opportunities to make money.
A big mistake newbies make is trying to do everything at the same time. It just doesn’t work.
To increase your chances of success, you need to pick one thing — one sector, a market, or a specific trading style — and stick to it.
One of the most important decisions a trader has to make is figuring out what type of trader they want to be.
Here are the major categories of traders that dominate the stock market — based on their trading time frame.
Position traders
The goal of position traders is to snap up maximum potential profits, that’s why they’re often focused on long-term price movement.
They often buy assets that they speculate will spike in the long-term — which means trades could last over a period of weeks or months.
To increase the chances of success, position traders will use weekly and monthly price charts to evaluate the markets…together with technical indicators and fundamental analysis to identify potential entry and exit points for each trade.
Day traders
Day trading is the activity of buying and selling penny stocks based on the price movement within a single trading day.
Penny stocks are volatile which usually leads to quick changes in price action. And day traders often look to take advantage of these moves by making dozens of trades in a single day, based on technical analysis.
These positions are held for a very short period usually seconds to a few hours during the trading window.
Unless the trader has all the necessary traits required to become a successful day trader — like experience, discipline, and decision-making — the profit margin is usually very small.
One thing that holds true for day trading is that it requires serious attention to monitor positions and decide when to exit.
Swing traders
Swing trading is a trading technique that’s based on identifying swings in stocks — in this case, penny stocks — that occur over a period of time (usually a few days to a few weeks).
Unlike with other techniques (like day trading) that moves happen within a short period of time, say, minutes, swing traders do not need to be glued to their computer all day. This gives you the flexibility to trade while keeping your full-time job.
Swing traders usually study technical and fundamental indicators and enter positions on stocks that have the potential to gap up over a short period of time. This can open you up to the possibility of larger profits that can be acquired from holding on to the trade for a little longer.
Scalpers
Scalpers are the real definition of “short-term traders”.
Their goal is profiting off small price changes after reselling. This means scalp traders only hold positions open for seconds or minutes at most.
It’s like day trading but at buying and selling at an even higher frequency — with some executing over a hundred trades per day…and that’s when the profit accumulates.
This style of trading requires tight spreads, more trading volume, and increased volatility. That’s why scalpers tend to trade only during the busiest times of the trading day.
What and Where Should You Keep An Eye On?
Depending on the sector you like to trade, or your trading style…
Here are some recommendations you might find helpful:
Biotechnology
The global biotech market is growing rapidly.
And it’s often the focus of most traders because these stocks offer highly speculative opportunities — something that others do not. Biotech penny stocks are also extremely volatile — which opens up lucrative opportunities for traders that play their cards right.
If you’re interested in trading and making the most of biotech stocks, you’d find Jeff Williams’ service — Biotech Breakouts — especially useful. As a stock trader with more than two decades of experience, he has learned a lot about these fast-moving stocks.
Here’s a good example of a Biotech stock that caught his attention.
Technology
Besides the big names, there are several up-and-coming tech companies trading in the penny stock market today. These stock prices can soar if their underlying companies’ products become widely adopted.
And just like other sectors, there is very high volatility…but high rewards as well.
I regularly trade penny tech stocks and share my watchlist and lessons — for example this successful CYRN trade I talked about last week. But I also share my trade ideas and game plan with subscribers in my exclusive community — Jason Bond Picks.
Cryptocurrency
This is no news. This sector is undeniably big, growing at an insane rate, and minting new millionaires regularly!
Now, I’ll be straight with you. Crypto isn’t my forte, but for those interested in staying ahead in the world of digital assets, I always recommend they pay attention to RagingBull’s expert — Jake McCarthy.
He bought bitcoin as far back as 2013…when it was just a few hundred bucks…and has been trading digital coins successfully ever since. So believe me, he knows this stuff.
From Airdrops to the Metaverse and everything in between, Jake has got you covered. And he shares his ideas daily on Coin Command.
Options
Options trading is in some way similar to stock trading, but they’re quite different.
There are a number of benefits to trading options – especially the leverage they give compared to penny stocks.
The good side of Options is that they can be wildly profitable. The bad side, however, is that they are very risky.
That’s why it’s important to be constantly learning and improving in order to boost your chances of success. And there’s no better person to learn from than the trading veteran, Jeff Bishop.
Jeff has been trading successfully for a little over 20 years, and for those that aren’t aware…he shares his ideas and lessons for free here. Here’s a recent article about bullish charts in today’s volatile market.
What about you — what type of trader are you?
Let me know in the comment box below.
