1. Introduction to Stock Trader Types
  2. Stock Traders’ vs. Stock Investors' Roles in the Marketplace
  3. Decision-Making Methods: Informed, Uninformed, Intuitive
  4. Informed Traders: Fundamental Traders, Technical Traders
  5. Swing Traders
  6. Buy and Hold Traders
  7. Value Traders
  8. Trend Traders
  9. KISS Traders
  10. Momentum Traders
  11. Range-bound Traders - Break-out Traders - Channel Traders
  12. Options Traders
  13. Options Seller Traders
  14. Day Traders
  15. Pattern Day Traders
  16. Intra-Day Traders
  17. Intra-Day Scalp Traders
  18. Contrarian Traders
  19. Active and Passive Traders
  20. Futures Traders
  21. Forex Traders
  22. Online Stock Traders
  23. Pivot Traders
  24. News Traders
  25. Noise Traders
  26. Sentiment-Oriented Technical Traders
  27. Intuitive Traders
  28. Price Action Traders
  29. Price Traders
  30. Detrimental Traders
  31. Unsuccessful Types of Stock Traders
  32. Conclusion

The distinguishing element for an online stock trader is the use of a brokerage’s online proprietary trading platform, through which the trader places buy and sell orders for financial securities or currencies. Online trading platforms are ubiquitous now but have only been in use for the past two decades or so. With the proliferation of brokerages online, traders can deal in stocks, bonds, options, futures, and currencies, and they can do so with the convenience of a mobile device. Beyond this, online stock traders enjoy the speed benefits associated with these brokerages; without the need for paper-based documents, execution and settling can be done very quickly.

Online trading

Online trading is also known as electronic trading or etrading, and it is a method of trading securities electronically. This is often done via an electronic communication network (ECN), such as a virtual market place like NASDAQ or Globex. Online trading stands in contrast to traditional floor trading and phone trading. While it is generally smooth and straightforward, it’s also not unheard of for glitches and mishandled trades to occasionally take place.

Most retail trading in the U.S. is done online, but retail trading volumes are dwarfed by institutional and inter-dealer trading. In some developing countries, retail trading occupies a larger percentage of overall trading volume.

Becoming an online stock trader

One distinct advantage to online stock trading is that it is accessible. Anyone with a computer or mobile device and enough money to open an account, as well as a reasonable financial history, may invest in the market. There are many different brokerage services and apps, available in both desktop and mobile platform, so it’s key that investors find the service which meets their needs best. Still, just because online trading makes the market more accessible, it doesn’t mean that online traders should take their process less seriously.

Online traders should be sure to understand the following terms and concepts before beginning their investments:

·  Market Orders - A market order is the simplest type of stock trade you can place. It means that if a trader wants to buy or sell 100 shares of a stock, for instance, it will get transmitted to the exchange and the order will be filled at the current price.

·  Limit Orders -A limit order lets a trader set a minimum or maximum price before their stock trade gets converted to a market order and sent to the stock exchange. Until a trader becomes very experienced, almost all orders should be limit orders to protect themselves.

·  All-or-None Orders - An all-or-none stock trade allows the trader to tell their broker that they only want an order filled if they can buy, or sell, all of the shares they instructed them to trade. This is important for strategies such as selling covered calls.

·  Stop Order and Stop Limit Orders - A sell stop order would allow an investor to avoid further losses or protect a profit if a stock drops below a certain level. The order then gets sent to the exchange and becomes a market order when triggered.

·  Selling Short and Buy to Cover Orders - A short sell order means a trader tells their broker to sell shares of stock that they don't own. If the stock falls, they can close the transaction with a buy-to-close order, replacing the borrowed stock and pocketing the difference.

·  Day and GTC Orders - When a trader is ready to trade stock, they can place either a day order, which will expire at the end of the trading day if it isn't filled, or a good-till-canceled order, which won't expire for up to sixty days, depending upon the broker.

·  Extended hours trading - The extended hours market allows a trader to place trades between 8 pm and 8 am; times when the market is traditionally closed. This system permits investors to react to corporate announcements and news prior to the next session. There are a number of risks associated with extended hours orders; primarily an increase in volatility as a result of decreased liquidity. Any time there are fewer shares being traded, stock price movements become larger because buy and sell orders have a disproportional influence upon the quoted value. As a result, the price a trader pays for an extended hours’ trade can differ substantially from what they would pay (or receive) during regular market hours.

·  Trailing Stop Orders - A trailing stop order can let a trader protect profits. As the stock price goes up, they can tell their broker to keep trailing it and only sell if it falls, say, $2 from its highest price ever. At that point, the order gets converted to a market order.

·  Bracketed Orders - Bracketed orders may allow new investors to combine the best of both worlds. They can protect their profits, limit their losses, and structure their brokerage orders according to their own outlook for a stock or exchange traded funds.

While these concepts may sound complicated, they are actually relatively straightforward. Online traders should consider them tools in their stock-trading toolbox

Online traders experience a number of benefits, including reduced transaction cost (thanks to the automation process and “straight-through processing”), higher liquidity levels, and increased transparency. They also bring about greater competition, as there are now more traders accessing a variety of different markets at once.

 


Pivot Traders
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