Markets
Platforms
Accounts
Investors
Partner Programs
Institutions
Contests
loyalty
Tools
Trading
Written by Sarah Abbas
Fact checked by Antonio Di Giacomo
Updated 20 October 2025
Table of Contents
Choosing the right type of trading is one of the most important decisions in your journey as a stock market trader. Each approach, whether intraday, swing, position, or scalping, comes with its own strategy, time commitment, and level of risk.
But you might wonder, how many types of trading are there? The answer isn’t fixed. While most strategies are grouped into four main styles based on time horizon, the markets have evolved far beyond that.
Understanding these trading types can help you make informed decisions that align with your financial goals. In this article, we’ll explore 13 of the most common and influential trading types that shape how modern traders operate and succeed in today’s dynamic stock market.
Key Takeaways
Choose your timeframe to match your life: Scalping requires constant screen time, while swing or position trading fits a busy schedule for long-term growth.
Risk correlates with speed: Day trading carries higher stakes from rapid decisions, whereas long-term strategies mitigate risk through patience and compounding.
Align strategy with personality: Succeed by matching analytical approaches to your strengths, whether technical charts for detail-oriented traders or fundamental analysis for big-picture thinkers.
Try a No-Risk Demo Account
Register for a free demo and refine your trading strategies.
Here are the top 13 types of trading in the stock market to use in your trading strategy:
Day Trading
Swing Trading
Scalping
Position Trading
Momentum Trading
Algorithmic Trading
Social Trading
Copy Trading
News Trading
Technical trading
Fundamental trading
Delivery trading
Event-Driven Trading
Finding the right trading style depends on your personality, schedule, and tolerance for risk. Ask yourself these three simple questions to identify which approach fits you best:
How much time can you commit?
Full day available → Day Trading or Scalping
A few hours per week → Swing Trading
Minimal time → Position Trading or Investing
What is your risk tolerance?
High risk appetite → Scalping or Day Trading
Moderate risk → Swing Trading
Low risk → Position Trading or Delivery Trading
What is your experience level?
Beginner: Start with Swing or Position Trading
Intermediate: Try Day or Momentum Trading
Advanced: Explore Scalping or Algorithmic Trading
For most beginners, Swing Trading and Position Trading (including Delivery Trading) are the best places to start.
Swing Trading offers a balanced pace, less time-demanding than day trading and less stressful than scalping.
It gives beginners time to analyze charts, follow market news, and learn from each trade without constant screen time.
Position/Delivery Trading is closer to long-term investing. It requires minimal monitoring and focuses on fundamentals, helping new traders build patience, discipline, and a solid understanding of market behavior.
There is no single “most profitable” style. Profitability depends on your skill, discipline, and risk management, not the strategy you choose.
Below is a table demonstrating a risk vs. reward spectrum:
Potential
Risk/Skill Level
Example Trading Styles
High
Scalping, Day Trading
Medium
Swing, Momentum, News Trading
Low
Position, Delivery, Fundamental Trading
The most profitable traders aren’t those who try every style, they’re the ones who master one approach and refine it over time.
The four core trading styles that most traders use in the financial markets are:
Day trading
Day trading is among the most popular and widely recognized types of stock trading, particularly among those who enjoy fast-paced action and instant results.
In day trading, all positions are opened and closed within the same trading day, meaning no positions are held overnight.
The core idea behind day trading is to capitalize on small price movements within a single day.
Day traders usually make multiple trades throughout the day, aiming to profit from minute fluctuations in stock prices.
This stock trading type requires significant time, attention, and discipline, as decisions must be made quickly.
Some of the best day trading strategies include:
Scalping: This involves making numerous small trades throughout the day, aiming to gain a few cents per trade. Volume is key. Traders rely on many trades to build significant profits.
Momentum Trading: In this strategy, traders look for stocks that are moving significantly in one direction with high volume. They buy when the stock is gaining momentum and sell when it starts to lose steam.
Technical Analysis: Day traders often use charts, patterns, and indicators like moving averages and Bollinger Bands to predict price movements.
While day trading can be highly profitable, it’s also risky. The fast-paced nature of this type of stock trading style means that significant losses can occur just as quickly as gains. It’s best suited for experienced traders who can devote full attention to the markets during market hours.
Swing trading is a type of trading that falls somewhere between day trading and long-term investing. Unlike day trading, swing traders hold their positions for several days or even weeks, aiming to profit from “swings” in the market.
Swing traders focus on capturing a portion of an expected price move. While day traders look at minute-to-minute price changes, swing traders look at trends that play out over several days.
This is considered one of the most profitable trading types that allows more flexibility, as you don’t need to be glued to your computer screen all day.
Some effective swing trading techniques include:
Trend Following: This involves identifying the overall direction of the market and making trades that align with this trend. If the market is trending upwards, for example, a swing trader might look to buy stocks that are expected to continue rising.
Support and Resistance: Swing traders often use support and resistance levels to make trading decisions. They might buy when a stock’s price bounces off a support level or sell when it hits resistance.
Technical Indicators: Like day traders, swing traders also rely on technical analysis, but they focus on longer timeframes, such as daily or weekly charts.
The main difference between swing trading and day trading is the time horizon. Swing trading is less time-intensive and allows for more considered decision-making, making it a good option for those who can’t dedicate their entire day to trading.
Aspect
Holding Period
Few days to weeks
Intraday (closed same day)
Trade Frequency
Low (few trades per week)
High (multiple trades per day)
Time Commitment
Moderate (check charts occasionally)
High (full-time monitoring)
Profit Per Trade
Larger (targets bigger moves)
Smaller (scalps short moves)
Scalping is a very short-term trading style that involves making dozens or even hundreds of trades in a single day, each aiming for tiny profits.
The idea is to accumulate small gains that can add up to significant profits by the end of the day.
Scalpers hold their positions for seconds or minutes. They aim to capitalize on small price movements, often relying on bid-ask spreads and minute market fluctuations.
Due to the high frequency of trades, scalping requires access to highly liquid markets, fast execution platforms, and low trading fees.
Effective scalping techniques include:
Market Making: This involves placing buy and sell orders at slightly different prices to profit from the bid-ask spread.
Order Flow Analysis: Scalpers often analyze the order book to identify potential short-term price movements.
Range Trading: This technique involves identifying key support and resistance levels and making trades within that range.
While both scalping and day trading involve short-term trades, scalping is much more rapid and requires a different mindset.
Scalping demands quick reflexes and an ability to make split-second decisions, while day trading, though fast-paced, allows for a bit more deliberation.
Seconds to a few minutes
Minutes to hours (closed same day)
Very high (dozens+ per day)
Profit per Trade
Very small
Small to medium
Extremely high
Scalping is a fast-paced trading style focused on making dozens, or even hundreds, of small trades per day. It aims to profit from tiny price movements, often lasting just seconds. While it offers frequent trading opportunities, it also requires intense focus, lightning-fast execution, and a high tolerance for stress and risk.
Position trading is a long-term approach that involves holding positions for weeks, months, or even years. The best type of trading is more akin to investing, as it relies on fundamental analysis and long-term market trends.
Position traders aim to profit from large price movements over an extended period. They are less concerned with short-term market fluctuations and more focused on the overall direction of a stock or market.
Because this type of stock trading involves holding positions for a long time, it’s crucial to thoroughly understand the underlying asset and its growth potential.
Some of the best trading type strategies for position traders include:
Buy and Hold: This strategy involves buying a stock with the expectation that it will increase in value over time, regardless of short-term market movements.
Trend Following: Like swing traders, position traders often follow trends but on a much longer timeframe. They might hold onto a stock for several months or even years if the trend is strong.
Fundamental Analysis: Position traders rely heavily on fundamental analysis, evaluating a company’s financial health, industry position, and economic conditions to make their decisions.
Position trading is a long-term approach that involves holding trades for weeks, months, or even years. It’s ideal for traders who prefer a more passive style and want to capture major market trends.
While this strategy reduces the need for constant monitoring, it also exposes traders to prolonged market risks and requires strong discipline to hold through volatility.
Position trading contrasts sharply with short-term trading styles like day trading and scalping. It’s better suited for those who prefer a more hands-off approach and are comfortable with the patience required to see their trades through.
Besides the four core types of trading styles, there are also multiple advanced trading strategies that traders can use in their financial strategies.
Momentum trading is a type of trading that involves buying stocks that are showing strong upward momentum and selling them once they start to lose steam. The goal is to ride the wave of a stock’s price surge for as long as possible.
Momentum traders look for stocks that are moving in one direction with high volume and ride that trend until it shows signs of reversing. This type of trading requires quick decision-making and a keen eye for market trends.
Momentum trading can be highly profitable, but it also comes with significant risks. Stocks can change direction quickly, so it’s important to have a solid risk management plan in place, such as setting stop-loss orders to protect against sudden reversals.
Momentum trading focuses on identifying and riding stocks that are moving strongly in one direction with high volume. It offers quick profit potential when trends are strong, but requires precise timing and fast decision-making.
Since trends can reverse suddenly, momentum trading carries high risk and is best suited for active traders who can react quickly to market shifts.
Algorithmic trading, or algo-trading or automated trading, involves computer programs executing trades based on predefined criteria.
This type of trading can be used in short-term and long-term strategies and is popular among institutional traders and hedge funds.
In algorithmic trading, a trader creates a set of rules for trade entries and exits, which are then programmed into a computer.
The algorithm continuously monitors the market and executes trades when the conditions are met. This can involve simple strategies, such as buying a stock when its price crosses above its moving average, or more complex strategies that factor in multiple indicators and market conditions.
This advanced technique is one of the most sophisticated types of trading in stock market.
There are several types of algorithmic trading strategies, including:
Market Making: Algorithms are used to simultaneously place buy and sell orders for the same asset, profiting from the bid-ask spread.
Arbitrage: This strategy involves taking advantage of price differences between markets or exchanges.
Trend-Following: Algorithms can be programmed to follow long-term trends, entering trades when certain technical indicators are met.
Algorithmic trading offer several advantages, such as executing trades at high speeds, removing emotional bias, and backtesting strategies using historical data.
However, it also comes with challenges, including the need for technical expertise, the risk of software errors, and the potential for market disruptions caused by high-frequency trading.
Social trading is a modern type of trading that allows traders to observe, follow, and replicate the trades of experienced traders within an online trading community or platform.
It leverages social networks and financial market tools to enable less-experienced traders to learn from experts and make informed trading decisions.
Social trading platforms are a hub where traders can share insights, analyze performance, and copy trades directly. Users can browse profiles of seasoned traders, view their trading history, and follow or automatically copy their trades in real time.
This approach eliminates the need for extensive market analysis, as the expertise of others informs decisions. It’s an accessible way to participate in the market and learn from more experienced traders.
Social trading allows individuals to follow and copy the trades of experienced investors through online platforms. It’s accessible to beginners and helps shorten the learning curve, but it also involves relying on others’ strategies, which may not always align with your risk tolerance or financial goals. Due diligence is essential to avoid blindly following underperforming traders.
Unlike traditional trading, which requires significant market knowledge and independent analysis, social trading simplifies the process by relying on the expertise of others.
Social trading blends the benefits of passive investing with the dynamism of active trading, making it a contender for the most profitable trading type for many participants.
Copy trading is a modern, user-friendly approach that enables traders to automatically replicate the trades of more experienced and successful investors. It’s a subset of social trading but focuses specifically on mirroring real-time trades.
In copy trading, you select a professional trader (often called a signal provider) based on their performance metrics, trading style, and risk level. Once connected, every time they open or close a trade, the same action is executed in your account proportionally. You retain full control and can start, stop, or adjust the copy at any time.
This approach significantly lowers the barrier to entry for beginners, allowing them to participate in the market while learning by observation.
Popular techniques used in copy trading include:
Full Auto Copying: Automatically mirror all trades and risk parameters of the selected trader without manual intervention.
Manual Adjustment: Follow the strategy but change trade size, stop loss, or take profit to suit your risk profile.
Diversified Copy Portfolios: Copy multiple traders to spread risk across strategies and instruments.
Copy trading lets you automatically replicate the trades of selected professional traders in real time. It’s a hands-off approach ideal for beginners or those with limited time, offering exposure to the markets without active involvement. However, success depends heavily on the chosen trader’s performance, and losses are still your responsibility, even if the strategy isn’t yours.
While social trading emphasizes interaction and learning from others, copy trading automates execution. It’s more passive and ideal for those who prefer a hands-off strategy but still want to benefit from expert insights.
How It Works
Auto-copies trades from selected traders
Follows shared ideas in a trading community
Execution
Fully automated
Manual or semi-automated
Control
Minimal once trader is chosen
User decides when and what to trade
Skill Needed
Beginner-friendly
Good for beginners and learners
Learning
Low (passive)
High (community-based insights)
News trading is a time-sensitive strategy that aims to profit from market movements caused by economic events, geopolitical developments, or breaking news. This style of trading is fast-paced and often used around scheduled data releases.
News traders monitor economic calendars and news feeds for high-impact announcements such as interest rate decisions, GDP reports, or central bank meetings. These events often create sharp price movements within seconds, offering opportunities for quick profits, but also increasing risk.
To succeed, news traders must act quickly, have access to low-latency execution platforms, and understand how the market is likely to react to the data.
Effective news trading strategies include:
Pre-News Positioning: Taking positions based on expected outcomes of major announcements.
Post-News Reaction: Trading the immediate price reaction once the news is released.
Straddle Strategy: Placing simultaneous buy and sell orders before the news, catching the breakout direction either way.
News trading involves placing trades based on market-moving news events, such as economic releases, central bank decisions, or geopolitical developments. It can lead to rapid profits when markets react sharply, but also comes with high volatility, slippage, and unpredictable price spikes. This style requires quick execution, strong market awareness, and careful risk management.
Technical trading is a strategy that relies on chart patterns, indicators, and price action to make trading decisions. Rather than focusing on company fundamentals, technical traders believe that all relevant information is already reflected in the price.
Traders analyze historical price data, trading volume, support and resistance levels, and chart patterns to predict future movements. This approach is used across various timeframes and asset classes.
Effective technical trading strategies include:
Trend Following: Buying in an uptrend and selling in a downtrend using indicators like moving averages.
Breakout Trading: Entering trades when price breaks through established levels.
Oscillator-Based Signals: Using tools like RSI or MACD to find overbought or oversold conditions.
Technical trading allows for precise entry and exit points and is highly adaptable across markets. However, it requires experience interpreting patterns and may produce false signals during choppy or low-volume conditions.
Fundamental trading involves analyzing a company’s financial statements, industry health, and macroeconomic conditions to estimate its true value. Traders monitor events such as earnings reports, central bank announcements, inflation data, and political developments to anticipate market direction.
When an asset is undervalued or overvalued compared to its fundamentals, traders position accordingly, often holding for longer durations to let value play out.
Traders assess a company's earnings, revenue, debt, market conditions, and economic data to determine whether an asset is overvalued or undervalued, then position accordingly.
Some of the best trading type strategies for fundemantal traders include:
Earnings-Based Trading: Buying or selling based on quarterly earnings reports.
Macroeconomic Analysis: Using GDP, inflation, and interest rate data to guide trades.
Value Investing: Long-term buying of undervalued assets for future growth.
This approach provides deeper insights into long-term value but often lags during short-term market volatility. It also requires extensive research and patience.
Delivery trading is a traditional form of stock trading where shares are bought and held in a demat account for more than one day. It is common among investors with a long-term perspective.
In delivery trading, investors purchase stocks through a brokerage and hold them in their demat (electronic) account beyond the trading day, often for months or years. This method avoids intraday settlement obligations and gives full ownership of the asset, including dividend rights. It’s a simple, long-term strategy used to build wealth gradually through capital appreciation and income from dividends.
Delivery trading is low-risk compared to intraday strategies and avoids time constraints. However, it requires significant capital and offers slower returns.
Event-driven trading is a strategy that seeks to profit from volatility and price movements caused by specific market events such as earnings releases, mergers, or regulatory decisions. It combines elements of both fundamental and speculative analysis.
This type of trading focuses on identifying upcoming events that could significantly impact asset prices. Traders either position themselves ahead of the event based on predictions or react immediately after the event to capitalize on the price movement. It requires fast decision-making, a deep understanding of market reactions, and access to timely information.
Event-driven trading offers high-reward opportunities in short timeframes but carries high risk due to unpredictability, slippage, and news misinterpretation. It suits experienced traders who can manage volatility and react quickly.
The table below provides a comprehensive overview of the 13 best trading types in the stock market.
It covers each type of trading, along with a brief description, typical time horizon, key strategies, and whether it’s more suitable for beginners or advanced traders.
Type of Trading
Description
Time Horizon
Key Strategies
Suitable For
Buying and selling within the same day.
Intraday (minutes to hours)
Scalping, Momentum Trading, Technical Analysis
Advanced / Full-Time
Holding positions for days or weeks to capture price swings.
Short to medium-term
Trend Following, Support & Resistance, Technical Indicators
Beginner / Part-Time
Quick trades for small profits on tiny price movements.
Very short-term (seconds)
Market Making, Order Flow Analysis, Range Trading
Long-term approach focused on major price moves.
Long-term
Buy & Hold, Trend Following, Fundamental Analysis
Passive Traders
Profiting from strong price trends before they reverse.
Short-term to medium-term
Breakout Trading, RSI, Moving Averages
Intermediate / Active Traders
Uses automated programs for executing trades.
Short-term or long-term
Market Making, Arbitrage, Trend-Following
Copying or learning from experienced traders.
Varies
Copy Trading, Signal Sharing, Collaborative Learning
Beginner / Community-Focused
Automatically replicates trades of experienced traders in real time.
Auto Copying, Manual Adjustments, Multi-Trader Portfolios
Passive Traders / Beginners
Trading based on market reactions to economic or geopolitical news events.
Short-term
Pre-News Positioning, Post-News Reaction, Straddle Strategy
Technical Trading
Trading based on chart patterns, indicators, and price action.
Any (flexible)
Trend Following, Breakouts, Oscillator Signals
All Levels
Fundamental Trading
Trading based on economic data, company performance, and intrinsic value.
Medium to long-term
Earnings Plays, Macroeconomic Analysis, Value Investing
All Levels / Research-Oriented
Delivery Trading
Buying and holding shares beyond the trading day in a demat account.
Buy & Hold, Sector Rotation, Dividend Investing
Trading based on impactful events like earnings, M&A, or policy changes.
Merger Arbitrage, Earnings Plays, Regulatory Trades
Understanding the different types of trading is essential for anyone looking to succeed in the financial markets. From rapid-fire methods like scalping and news trading to longer-term approaches such as position and delivery trading, each style offers unique advantages and challenges.
By exploring these trading styles and implementing the best trading strategies, you can find the approach that best suits your goals and risk tolerance to start your trading journey in 2025!
Take the time to explore, test, and refine your preferred approach, because in trading, informed decisions are your greatest asset.
Ready for the Next Trading Step?
Open an account and get started.
Get the latest insights & exclusive offers delivered straight to your inbox.
Start Your Journey
Put your knowledge into action by opening an XS trading account today
For beginners with a full-time job, swing trading is highly recommended. It operates on a timeframe of days to weeks, allowing you to analyze the markets and manage positions outside of standard working hours without the need for constant screen monitoring.
The core difference is the holding period. Day trading involves opening and closing all positions within the same day to avoid overnight risk. Swing trading holds positions for several days or weeks to capture larger price “swings,” accepting overnight and weekend market exposure.
Yes, you can start with a small capital. Swing trading is often the most accessible, as it doesn’t require the high capital for rapid, small gains that scalping or day trading does. The key is to choose a broker with low fees and focus on highly liquid stocks.
While no trading is risk-free, position trading is generally considered the lowest-risk style. By focusing on long-term fundamental trends and ignoring short-term volatility, it allows investments more time to recover from temporary downturns, similar to a traditional investing approach.
Active styles have significant time demands:
Scalping: Requires hours of intense, uninterrupted focus.
Day Trading: Demands full attention during market hours.
Swing Trading: Requires a few hours per week for research and trade management.
The most common mistake is a mismatch between their personality, schedule, and chosen strategy. For example, a risk-averse person with a full-time job choosing high-pressure day trading is a recipe for stress and loss. The best style is one you can execute consistently.
Sarah Abbas
SEO content writer
Sarah Abbas is an SEO content writer with close to two years of experience creating educational content on finance and trading. Sarah brings a unique approach by combining creativity with clarity, transforming complex concepts into content that's easy to grasp.
Antonio Di Giacomo
Market Analyst
Antonio Di Giacomo studied at the Bessières School of Accounting in Paris, France, as well as at the Instituto Tecnológico Autónomo de México (ITAM). He has experience in technical analysis of financial markets, focusing on price action and fundamental analysis. After many years in the financial markets, he now prefers to share his knowledge with future traders and explain this excellent business to them.
This written/visual material is comprised of personal opinions and ideas and may not reflect those of the Company. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. XS, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same. Our platform may not offer all the products or services mentioned.
Register to our Newsletter to always be updated of our latest news!
