EP 068: Money Mondays Episode 6: The Four Different Stock Trading Styles

Something this industry has a tendency to do that’s sort of backwards is bashing a certain style of trading. The reality is everything works and nothing works. There are four stock trading styles and which one you choose is going to be unique to you.

You can take a look at any industry, sector, or style and find somebody that’s making money in it but here’s the thing…

You’ve got to pick the right style for you. 

Check out Episode 6 of Money Mondays below to take a deeper look at the four different stock trading styles and find out which one works best for you. 

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The first of the four different stock trading styles is the long-term investor.

Some people can see long term investing as boring but making money doesn't necessarily have to be exciting. There's not really anything to do every day for this style of trading but you're forecasting and thinking down the road.

You're setting up your portfolio for at least 5 years. You're not worrying about day-to-day fluctuations or when a company hits a rough patch. For example, let's think back to the Facebook & Cambridge Analytica scandal. Facebook had a rough 6-12 months following the scandal but people eventually came back to the platform and businesses began running advertisements again...the company bounced back.

You want to think about what the company is doing now and what they'll be doing 5 years from now.

The second of the four different stock trading styles is the dividend investor.

Similar to long term investing, Dividend Investors are in it for the long haul but are looking to get a little bit of a payout while they're waiting. Dividends pay you quarterly depending on the company and they payout you receive is called a yield. 

When I think about dividend investing, it's good to look at it like an investment property. You buy a house and you're waiting for the value of the house to increase but you put a renter in there to get a check every month while you wait.

It's important to really pay attention to slow, steady growth when it comes to dividend investing. A lot of people make the mistake of investing in a declining stock just to get that quarterly payout but end up losing money in the long run.

The third of the four different stock trading styles is the day trader.

The goal of a day trader is to make money every day. They're going into the market and looking for an opportunity  to make a profit day in and day out. They don't hold positions overnight and they want to capitalize on volume.

Volume is where the day trading magic really happens. For example: a stock could be $5 a share and you purchase 1,000 shares for $5,000. If that stock moves just $0.50 in a day, you'll make $500 of those 1,000 shares.

The day trader is all about capitalizing on volume.

The fourth of the four different stock trading styles is the swing trader.

A swing trader has no loyalty. They're just looking for opportunity.

When a swing trader looks at a chart and sees it moving up, they swing bullish. When the stock goes down, they swing bearish. This gives them a couple of different options like closing out at the top and waiting or closing out their bullish trade and picking up a bearish trade.

knowing how to read charts is essential to swing trading. You have to be able to analyze a stocks movements in order to make the necessary decisions. 

A swing trader is also in control of their emotions. There have been plenty of times during my weekly coaching calls with the Power Trades University members that I've said I liked a stock on Monday and by Friday I'm saying that I'm closing it out and taking profits because I don't like it anymore.

You have to be able to look at the chart and makes the decisions that will make you the most money...with zero emotion attached.

Now the last style of trading is a custom category that's more of a hybrid style: The Power Trader.

Power trading is waiting for a stock to swing the direction we believe it's going to swing then putting a lot of power behind it. It's a combination of the day trader, the short-term trader, the long-term trader, and the swing trader all wrapped up into one.

It's like when you're seeing something swinging or turning around on a daily basis, you might trade it and then come in with a bunch of power behind it. A great example of power trading can be seen in post "How I made $100k in One Day."

Power trading is married to the chart, the risk-reward ratio, and if you can come in with enough power to get in and get out.

If you are looking to gain more education about the stock market check out my resources below...

1. Stock Market Starter Pack - Free Download - CLICK HERE 

2. What's the Best Trading Account for Me? - Blog Post - CLICK HERE

3. How to Potentially Profit in Any Market Condition - Free Webinar -
CLICK HERE

4. Premium courses and coaching to go from beginner to trader - Power Trades University - CLICK HERE