All language subtitles for 1. Types of trading

Types of Trading Deciding what type of
trading we are going to carry out is one

of the first decisions that a trader
needs to make.

It is not usually definitive as we grow
as traders.

We will shape and adapt our trading to
what we feel most comfortable with, that

best suits us, or simply what we like
the most.

It is curious how at the beginning, when
we first get into trading and

investing, most of us are drawn almost
directly to the very short -term world

day trading.

Probably because our expectations at
that point are completely misplaced and

see a large number of trades as a means
to getting rich quickly.

This is a mistake.

It is no coincidence that most beginner
traders start with short -term trading

and lose absolutely everything in a few
days.

I think that everything is set up by
brokers and trainers to ensure this is

case. Obviously.

We cannot generalize, since there are
very good traders involved in scalping

day trading who win consistently.

But this is not usually the case.

What is usual is that inexperienced
traders who trade under this approach

There are many reasons that support this
hypothesis, but the main one, and the

one around which everything else
revolves, has to do with the greater

randomness of this type of trading
environment, or what is known as noise.

Noise is always present.

in all time frames, but it has a greater
impact the shorter you go.

Noise can be understood as the activity
that occurs but which does not have any

directional bias, such as that executed
by high frequency algorithms, or that

which takes place at times of high
volatility.

And obviously, the impact of this
variable is different across short,

long time frames.

It is important for our type of trading
to take this into account since it can

completely distort our analysis and
approach at any given moment.

In addition to noise, another downside
to short time frames is the fact that

information is updated much more
quickly, which means you have to re

what's happening almost endlessly.

If you trade on 1, 5, or 15 -minute
charts, keep in mind that every time

time period elapses, you'll have to
analyze what just happened.

The time dedication that this type of
trading requires and the level of stress

involved is truly overwhelming.

If you do not have the proper knowledge
and experience, any attempt to do this

is almost certainly doomed to failure.

In the beginning, we all like to spend
hours and hours in front of the screen.

would say it is almost necessary.

But there comes a point where you wonder
whether there is any return that

justifies all that time invested.

And in most cases, there isn't.

and we sometimes forget a very important
factor that directly affects our

decisions. Stress.

The level of concentration that we need
to maintain during a session looking at

intraday charts is very high, and this
can lead to an unhealthy level of

especially if you keep it up for a long
period.

Ask yourself if you can see yourself
trading in that environment 20 years

now. That may be the decisive factor.

These are aspects that are not usually
talked about.

but I certainly believe that they
require consideration.

It also helps us to get to know
ourselves better and to identify our

and weaknesses.

This need for greater concentration and
stress is directly related to the

possibility of making bad decisions.

You better believe it.

Maintaining the right state of mind is
crucial.

Day trading is more likely to lead to
bankruptcy, simply because the effects

one bad day are much more devastating.

Being in the wrong state of mind leads
to bad decisions, over -leveraging,

coming up with strange trades, not using
stop -loss, etc.

And we already know the result of all
this.

Sending your account into the red.

Developing a medium -long -term trade in
itself can already be considered an

indirect emotional management measure.

It really is the most suitable
environment to take care of your mental

You avoid the possibility of falling
into a state of paralyzing stress.

leading you to make bad decisions.

The amount of signals is naturally
fewer. You have less exposure to the

and, if you follow the trading plan, the
negative effects of having a bad day,

in this case, are much less devastating
than if you were day trading.

Do you remember what I said about noise?

Here, too, this has less of an impact.

I personally believe that trading on
more long -term charts, preferably daily

ones, may be the best decision for most
traders.

especially for beginners.

Swing trading, in which a position is
held for days or weeks, is much quieter.

It allows you to take your time to
analyze without the rush of knowing that

five minutes a new bar will appear that
needs to be evaluated.

This promotes more objective decision
making as it both minimizes noise and

gives us enough time to analyze all the
inputs we need to look at before taking

action.

Another advantage of trading over long
time frames is that it allows us to

diversify our portfolio.

If you trade in very short -term time
frames, 1 to 15 minutes, usually this

allows you time to trade in one or two
markets, which makes sense, leaving you

fully exposed to the risk assumed in
each of these.

By increasing the time frame, you will
be able to maintain positions for a

greater number of assets, which will
allow you to combine operations in

of a different nature, allowing you
greater diversification.

This is something that is very important
in order to maintain consistency in the

long term.

A final thought on this. You need to
evaluate everything I have described

an objective point of view.

If you are a beginner, you should almost
exclusively evaluate the trade -in

charts with higher time frames until you
gain enough knowledge and experience.

In an intermediate step, you can begin
to gauge what time frame you feel

comfortable trading in, one that doesn't
lead you to experience high levels of

stress, that allows you to make
decisions that are as thought through

objective as possible, and that suits
your availability in terms of time.

Over time, you will have defined the
type of trading with which you feel

comfortable.