What is a trader? Beginner's Guide
A trader is a person who carrys out any purchases and sales of assets in the financial markets. We can say that the trader's job is to buy and sell, with the aim of obtaining profitability from these operations.
In this post we'll cover:
- Private and professional traders - Requirements to be a trader - Different types of traders
Firstly, a distinction should be made between private and professional traders.
The private trader is the one who performs operations in a personal capacity. These traders analyze the market and make their own decisions in order to make profit. In short, working for themselves alone and not for third parties. Operations can be made from home or from anywhere in the world. The professional trader works for companies or funds, that is, for a third party. These traders are paid and also receive an extra bonus based on the profits they have made.
Since the rise of the Internet, independent traders at home are more and more numerous because online trading has afforded relatively easy access to the markets. Complex equity markets have been demystified and offered flexible and accessible trading conditions. To invest in the stock market on the web and become an autonomous online trader, all you'd need is the following basic equipment:
- An internet connection
- A computer, a tablet or a smartphone
- A stock broker
- A trading account
- A trading platform
It's also worth bearing in mind the classifications for traders, which are made according to the type of trading strategies used and the time that they usually keep their operations open. Some of the different types of traders are:
Scalper: traders who are responsible for buying and selling stocks or currencies in the very short term. Day Trader: traders who analyze the markets and complete operations every day. Swing Trader: these traders take advantage of a market momentum (bullish or bearish), with a time period of more than one day but not more than a couple of weeks. Position Trader: a long-term trader.
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