Lengthy Phrase

Lengthy term traders will function from finish of day data and look to hold trades for a couple of weeks up to numerous months. Usually pattern buying and selling.

Advantages

No require to view the markets intraday.

Less transactions means decrease commission expenses.

Price of equipment and data is minimum.

Disadvantages

Big equity swings on single positions with large stops.

Usually only one or 2 exceptional trades a year so patience is essential.

Larger capitalization required to trip lengthier term swings.

Regular dropping months.

Brief Phrase

Operating from intraday data and looking to hold for a day up to a week. Usually swing buying and selling.

Advantages

More possibilities for trades.

Much less chance of dropping months.

Much less reliance on 1 or two trades a year to make cash.

Disadvantages

Transaction expenses will be higher.

Intraday data adds to expenses.

Overnight danger turns into a element.

Day Trading

Operating from intraday data the day trader will attempt to take little earnings from intraday swings. All positions will be exited at the market close.

Advantages

Numerous buying and selling possibilities in a day.

A lot decrease chance of dropping months.

No overnight danger.

Reduced margin requirements due to no overnight danger.

Disadvantages

Transaction expenses will be high.

Psychologically more difficult due to frequency of buying and selling.

Earnings are restricted by needing to exit at the finish of the day.

Data expenses are high as real time data is essential.

Tim Wreford runs Online Futures Trading, a website that provides info and resources for traders. Tim also provides a free day trading system, the results of which are updated daily on the site.