The stock market in Canada presents an attractive means for investors and traders to maximize their returns. Tempted by trading Canada as a lucrative venture, you might be looking forward to diving into the stock market trading realm.
However, since you are a novice trader, you shouldn’t take the plunge into trading before determining the suitable type of stock market trading. Familiarizing yourself with varied trading types can help you make better trading strategies and decisions that suit your financial goals.
In this article, you can explore different types of stock market trading in Canada.
- Intraday Trading
Also referred to as day trading, intraday trading is the standard trading type you can opt for in the Canadian stock market. It involves purchasing and selling stocks on the same trading day. Although many traders engage in intraday trading to make higher profits by capitalizing on short-term price movements, this trading type also involves a high degree of risk.
Now that the traders close all their positions on the same day to avoid overnight risks, they must monitor the momentum of different stock assets to place the orders at the appropriate time.
- Position Trading
Another strategy you can choose for trading stocks in Canada is position trading. Like intraday trading, position trading requires traders to keep watch on the stock’s momentum before placing orders to buy stocks. It’s a long-term trading strategy wherein traders can buy and hold stocks for months to years to avail of long-term gains.
- Scalping
Scalping is like a day trading strategy but involves purchasing and selling stocks within a relatively short period, often for seconds or minutes. This stock market trading type is suitable for traders looking forward to making a profit by leveraging small price movements.
Only traders or scalpers with impressive observational skills and experience in pinpointing trades and placing orders can trade successfully using a scalping trading strategy. Therefore, it’s recommended to join the best trading courses in Canada to upskill and learn the fundamentals of scalping before trying your luck.
- Delivery Trading
A traditional strategy of buying and selling stocks in the Canadian stock market, delivery trading allows traders to hold securities for a more extended period. The traders can hold their purchased stocks for more than one trading day to own them as an investment.
- Swing Trading
Falling between intraday and position trading, it involves holding securities for some days to weeks to capitalize on medium-term price fluctuations. The main aim of any trader using this trading strategy is to capture the price movements, also known as ‘swings,’ that occur with a downtrend or uptrend.
Swing traders must know how to analyze charts in various durations to spot swings in price fluctuations and make decent profits.
All-in-All
The above listed are a few of the many stock market trading types in Canada. Since every trader has different expectations from the investments they make in the Canadian stock market, there is no best trading strategy to capitalize on. However, you should know that success comes to only a knowledgeable trader who can identify his trading style to meet his investment goals.
So, to acquire the necessary trading knowledge and skills, consider enrolling in the WiseHub Academy. This trading school in Canada can familiarise you with different types of stock trading in the country and help determine your trading style.
