Stock Trading: How to Get Started to Grow Your Wealth Published by Tim Thomas

Tim Thom

In this story, I'll explain what is stock trading, I’ll highlight the different types of traders, some of the trading strategies they use and more.

Stock trading has become almost mandatory for anyone looking to build wealth today. Several decades ago, stock trading was something done only by the rich on Wall Street. However, today with fast computers and online brokers, online trading has the lowest barriers to entry.

What is Stock Trading?

Stock trading is the practice of buying and selling stocks to capitalize on short-term or long-term market events for a profit. A company will issue shares of their company on the stock market, and these shares allow you to invest in their company. There are various types of players in the stock market. There are day traders, swing traders, algorithmic traders, investors, and market-makers. 

Common Money-Making Trading Strategies

There is one single question to be asked about value investing. Is the company’s intrinsic value less than the price it’s selling for on the stock market? If so, you should invest if the company is undervalued.

1. Value Investing Strategies

Common Money-Making Trading Strategies

Active trading based on technical analysis is a strategy most day traders employ. Essentially, they use short-term trading signals based on charts and technical indicators to interpret market volatility.

2. Technical Analysis Trading

Common Money-Making Trading Strategies

Financial derivatives trading has always been a tool for companies to hedge their bets or generate profit. But in recent years derivatives have become accessible for retail investors. There are limitless derivatives out there, including options, futures, forward, swaps, etc.

3. Financial Derivatives Trading (Options Trading)

Common Money-Making Trading Strategies

This trading strategy is extremely challenging to incorporate, as it requires a significant amount of individual research and time! You have to build up the infrastructure to automate your trades, research mathematically proven strategies, backtest your trades for profitability, etc. Most people who employ this type of trading have extreme amounts of education and usually have a Master’s or a Ph.D. degree.

4. Algorithmic Trading

Rise of Passive Investing

In recent years, passive investing has become extremely popular for retail investors. With low investment fees and growing animosity towards banks and mutual funds, it’s no question the active investing industry was ripe for disruption. Passive investing is a long-term investing strategy where you’re investing in diversified indexes or, at the very least, exchange-traded funds (ETFs) that track indexes. These indexes consist of many stocks based on various criteria. 

Swipe Up To Read The Whole Of The Stock Trading Post On My Blog Which Goes Into Much More Detail About The Strategies And Product Types Available to Traders.