Active trading strategies you should know

[Dream chaser]

Active trading is the act of buying and selling securities based on short-term movements to profit from the price movements on a short-term stock chart. The mentality associated with an active trading strategy differs from the long-term, buy-and-hold strategy found among passive or indexed investors. Active traders believe that short-term movements and capturing the market trend are where the profits are made.

There are various methods used to accomplish an active trading strategy, each with appropriate market environments and risks inherent in the strategy. Here are four of the most common active trading strategies and the built-in costs of each strategy.

KEY TAKEAWAYS
Active trading is a strategy that involves 'beating the market' through identifying and timing profitable trades, often for short holding periods.
Day trading entails opening and closing positions within the same trading day and is among the most exciting strategies.
Position trading requires investors to hold securities slightly longer, requiring patience as the trade develops.
Swing trading relies heavily on technical analysis to identify when to enter and exit a position.
Scalping takes advantage of pricing discrepancies, though it often requires larger amounts of upfront capital to make larger profit.