Wednesday, July 6, 2011

Identifying Yourself

Hi,
    A lot of people trades in the stock market. They are simply retail investors trying to get a source of income so as to increase their savings. However, most people whom i have know in the market, do not identify themselves as what type of investors are they.  In the end, they will tend to chase stocks and often get themselves burnt. That is when they will decide that stocks are high risk.

   Unfortunately, this is the classic case. Take it as a learning experience. You need active participation once you have stocks holdings.

   Generally, there are 3 types of investors that can be summarized:
  1. Position Traders: - Position traders are people that buys the stocks and treat it that they are co-owners of the business. They hold this stocks for long period of time.  Their mantle: BUY and HOLD philosophy applies. They will only sell when these companies is unable to innovate or when it is regarded as a sunset industry due to changes made to the industry. Their Buying and Selling of stocks is based on FUNDAMENTALS of the company. They are also known as investors. Their risk appetite is usually LOW.
  2. Swing Traders: - Swing traders are people whom buy and sell their stocks in a time frame of holding between 2 weeks to 2 months. This is the most common type of characteristics that you can find in the market. They use charting tools to assist them in Buying and Selling. Risk Appetite is MEDIUM. 
  3. IntraDay Traders: - These traders are know to be fast and furious. They trade on news and will usually close their position within the same day. Their RISK Appetite is VERY HIGH and usually this type of trading is for professional traders only. 
So having to discuss the 3 types of investor character, so what are you? If you like me, am a swing trader you can look forward to my blog as i'm starting to post on using the tools of the trade to help you to buy and sell in the market.

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