Weekend.... Time to have fun & get a bit lesson

Today, as I promised, weekend will be additional information that you can gain from my blog. Now, we'll talk abvout the TYPE of INVESTOR/TRADER inside the market.

As most people know that, there are only two types of trader inside the market. But actually, a lot of people didn't realized that actually there are 3 types of trader based on the style of trading. What are they??

1. Short-Mid Term Trader (0-1 year)

This type of trader usually doing a trade from a day-trade (intra-day) up to a swing trade for a year. Most of this type of trader only consider technical analysis to enter the market, even some still consider a bit about fundamental analysis. This type of trader usually quite 'greedy' and a bit 'fearless' but still they are not that greedy & not that fearless. They are quite consistent with the system they use and chart seems to be their language. Usually, the profit made is not more than 75% of their capital.

2. Mid-Long Term Trader (> 1 year(s))

This type of trader usually looking for a long term prospect company before they invest their money inside the company. Fundamental looks like everything for them, without fundamental report, they won't invest on that. But once they invest they will keep checking out the fundamental report of the company to ensure that they are in a 'good boat'. Usually they have no entry & exit system, everything is based on calculation & valuation of the stock. But most of the time, they are quite fear when the price has gone up, as they believe "What goes up will eventually goes down", which is sometimes are not believed by Short-Mid Term Trader. And most of the time they invest in a defensive stocks which will not be affected so much when crisis come. Finally, the profit usually more than 75% of their capital.

3. Speculator (gambler/scalper)

This type of trader is the most dangerous one & yet this type of trader is also the fastest to get the return of their speculation. This type of trader usually using their feeling to enter the market, when it goes up, they will follow & when it goes down they will short. Mostly, this type of trader 'die' in the middle of the war as they are doing a high risk thing which is not suppose to be done, but low-medium risk is expected. We can call them as scalper as they don't expect too much on the profit margin, they just think that if the profit is enough for them, then they will liquidate immediately. Usually their profit is not more than 10% of their capital. Yet they believe that High Risk will bring high return, which they don't realize that it will also bring high losses.

Based on the method of trading , there are also 3 types of trader:

1. Fundamentalist

This type of trader usually counting a stock using financial statement to know whether their stock is cheap or expensive. Ratio mastering is a must for them, like P/E, PBV, etc. A lot of ratios are required before they buy the stock. Cheap & expensive is again determined using ratios and sometimes becoming very subjective. Some people think that 10x P/E is cheap, some think that it is expensive (5x P/E is cheap). Can be said as quite no standard when determining the cheap or expensive of an equity.

2. Technician

This type of trader usually determining the price using chart, which is believed to be a language that will expressed the price whether it is cheap or expensive. This type of trader usually don't consider about fundamental data, but some still need it to ensure their picks. Usually, they are quite discipline to the chart, when the chart says enter, they will enter & they can be said as a systematic trader. There are two types also of technician, Traditional & Modern Technician. Traditional Technician usually using lines, trend lines & chart pattern to look at the chart, modern technician usually using indicator to determine the chart. But most of the time there's no pure traditional or pure modern one, most are double checking toward each other. Usually, a technician states their trading plan very clearly.

3. Feeling trader

The most dangerous one, who do their trade using feeling as a decision. They believe that their "Feeling Analysis" is the best, yet after they lost they will say that the 'BIG' player has bully them, which actually because they have no plan in their trading. This is the worst one, don't follow this type or you'll 'die' in the market.

Decide which type & method you are NOW!!! Have a great weekend....

Happy Investing^^

Disclaimer ON!!!