Trading strategies: Find the one that suits your investor profile

If you’re new to the trading world and don’t know where to start, understanding the different types of trading is the first step to building a profitable strategy. This article will guide you through the main modalities so you can identify which one best suits your situation.

▶ The four pillars of trading: what are the types of operation?

There are four fundamental types of trading that dominate the financial market. Each is distinguished by its time horizon, frequency of operations, and level of analysis required. Knowing them will allow you to choose the most suitable strategy according to your availability and profile.

① Very high-frequency trading: Scalping

Time horizon: seconds to a few minutes

This method is the most frenetic of all. The scalper opens and closes positions in very short periods, taking advantage of small price variations. It does not seek large market movements but aims to capitalize on the minimal difference between buy and sell prices.

How does it work? Imagine ETH fluctuating every three minutes. A 0.66% movement in that interval can represent significant gains if you repeat the operation dozens of times. However, each individual profit is modest, requiring multiple trades to accumulate profitability.

When combined with high leverage, returns can be spectacular… but so can losses. This tactic requires assets with high liquidity and volatility: cryptocurrencies, forex pairs, and commodities are ideal.

Is it for you? Only if you are a professional trader with experience. It demands extreme concentration, constant screen monitoring, and instant decision-making. If you have a full-time job, forget this option.

② Intraday operations: Day Trading

Time horizon: a few hours, without holding overnight positions

Day trading allows for longer operations than scalping, but with the rule of closing daily. You buy and sell financial instruments within the same day, taking advantage of volatility changes throughout the day.

Why does it work: Markets with higher liquidity and volatility offer better opportunities. If the price rises, you can sell easily. If it falls, there’s still time to adjust. This modality is popular in forex, cryptocurrencies, and CFDs.

Requires constant vigilance of intraday price changes. Like scalping, it is unsuitable if you cannot dedicate hours to daily monitoring. Stop-loss orders are practically mandatory to contain risks.

Is it for you? For professional or experienced traders with full-time availability. Beginners often make costly mistakes here.

③ Swing Trading: The middle ground for many

Time horizon: days to several weeks

Swing trading represents an attractive balance. You hold positions beyond a day but without committing to years of waiting. The goal is to capture intermediate trend movements.

The logic: Study charts to identify repetitive patterns: prices rise over days, fall, and repeat the cycle. The swing trader positions themselves to benefit from these predictable movements, without obsessing over the long-term value of the asset.

Clear advantages: requires fewer trades than scalping or day trading, transaction costs are lower, and you don’t need to be glued to the screen. Various instruments work well: forex, stocks, indices.

Is it for you? This is the recommended strategy for beginners. If you cannot or do not want to invest hours in daily analysis but want to participate actively, swing trading is your best ally.

④ Position Trading: Long-term investment

Time horizon: months to years

Here, time works in your favor. You open positions by analyzing the market’s long-term potential and hold them for even years. A trader entering a bear market can wait several years until the next bull market.

Real case: Amazon stocks illustrate this perfectly. An investor who bought in January 2014 at $18.21 and sold in January 2021 at $159.03 achieved a +140.82% gain. The growth was consistent but required extreme patience.

Analysis combination: Fundamental analysis dominates here. You will evaluate the business model, sector prospects, and economic cycles, complemented by technical analysis for timing.

Is it for you? If you don’t want trading to consume your daily life, this is an option. But you need steel patience and the ability to make rational decisions, avoiding panic during corrections.

▶ Quick comparison of the four styles

▶ How to choose your ideal strategy

Factor 1: Your availability of time

This is the most decisive factor. If you work full-time and only have a few hours, discard scalping and day trading. Swing trading or position trading are your only real paths to success without sacrificing your career.

Factor 2: The type of asset you will trade

Not all instruments suit all styles. Let’s look at two extreme examples:

NZD/USD (currency pair): Shows constant and significant volatility. Its fluctuations are frequent due to macroeconomic factors (New Zealand is a major dairy exporter). For these volatile assets, swing trading shines.

Amazon stocks: Showed a steady upward trend from 2014 to 2021, with no abrupt changes. This type of asset with a clear long-term trend is perfect for position trading.

Factor 3: Your mastery of analysis

Do you understand technical analysis? Can you read company balance sheets and reports? Mastering both fundamental and technical analysis dramatically reduces your risks. Study both before committing real money.

▶ Final risk warnings

All strategies carry the risk of loss. But scalping and day trading are particularly dangerous for beginners. They require advanced experience, repeated operations with volatile assets, and high operational costs.

Recommendation: If you are just starting out, avoid these two modalities. Implement stop-loss orders on all your positions without exception. Remember that predictions are not always accurate, and markets constantly adapt, so you must adjust your strategies as the situation evolves.

The key is to find the types of trading that genuinely fit your reality, not to force sophisticated methods you cannot manage properly.