Position Trader
Position trading encompasses the longest trading time frame; trades generally span a period of months to years. Position traders may use a combination of technical and fundamental analysis to make trading decisions, and often refer to weekly and monthly price charts when evaluating the markets. Typically, short-term price fluctuations are ignored in favor of identifying and profiting from longer-term trends. This style of trading most closely resembles investing. However, while buy-and-hold investing typically involves long trades only (profiting from a rising market), position traders may utilize both long and short trading strategies.

Swing Trader
Swing trading refers to a style of trading in which positions are held for a period of days or weeks in an attempt to capture short-term market moves. In general, swing traders rely on technical analysis and price action to determine profitable trade entry and exit points, paying less attention to the fundamentals. Trades are exited when a previously established profit target is reached, when the trade is stopped out (moves a certain amount in the wrong direction) or after a set amount of time has elapsed. Because swing trading takes place over a period of days to weeks (with an average of one to four days), this trading style does not necessarily require constant monitoring. As such, traders who are unable to monitor their positions throughout each trading session often gravitate toward this popular trading style.

Day Trader
Day trading refers to a style of trading in which positions are entered and exited on the same day. Unlike position and swing traders, a day trader does not hold any positions overnight, and all trades are closed by the end of the trading session using a profit target, stop loss or time exit (such as an end-of-day exit). Day traders typically use technical analysis to find and exploit intraday price fluctuations, viewing intraday price charts with minute, tick and/or volume based charting intervals. Because trades are held for a period of minutes to hours, large price moves are uncommon, so day traders rely on frequent small gains to build profits. To leverage their buying power, day traders usually trade with margin. Day trading is a full-time job since positions have to be constantly monitored and traders need to be immediately aware of any interruptions to the technology chain (for example, a lost Internet connection or a trading platform issue).

Scalp Trader
Scalp trading is an extremely active form of day trading that involves frequent buying and selling throughout the trading session. Scalp traders target the smallest intraday price movements and rely on frequent and very small gains to build profits. Profit targets and stops are used to manage positions that are generally held for a period of seconds to minutes. Because gains are small on any one trade, scalpers may place dozens or even hundreds of trades each trading session; as a result, it’s imperative that scalpers have access to low trading commissions. It should be noted that scalp trading is considered very risky because it relies on having a high percentage of winning trades. And because the average winning trade is generally many times smaller than the average losing trade, it can take just one or two losing trades to wipe out all of your profits profits. Precision is paramount with this style of trading, and scalping requires constant attention to the markets.

Breakout Trader
A type of trader who uses technical analysis to find potential trading opportunities, identifying situations where the price of an asset is likely to experience a substantial movement over a short period of time. Breakout traders generally look for key levels of support and resistance and will place transactions when the asset’s price passes through these levels. Long positions are taken when the price of an asset breaks through a level of resistance, and short positions are taken when the price breaks below a level of support.

Momentum Trader
These traders are looking for acceleration in a stock’s price, earnings, or revenues. The traders will then often take a long or short position in the stock with the hope that its momentum will continue in either an upward or downward direction. This strategy relies more on short-term movements in price rather than fundamental particulars of companies, and is not recommended for novices.

Therefore momentum traders trade stocks that are moving significantly in one direction on high volume. The length of time for which momentum traders hold their position in a trade depends on how quickly the stock is moving.

Momentum traders are truly a unique group of individuals. Unlike other traders or analysts who dissect a company’s financial statements or chart patterns, a momentum trader is only concerned with stocks in the news. These stocks will be the high percentage and volume movers of the day.

Source: investopedia.com