Stock traders: An Overview



Stock traders are regarded as market participants, which can be an individual or a company. It primarily buys shares of a firm and gives attention on the market itself instead of the fundamentals of the company.

A stock trader is can make profits through short-term price volatility with executed trades that lasts from seconds to several weeks. Moreover, most of the stock traders are professional. These traders areoften categorized as either full or part-time stock traders/investors and at the same time maintains certain professions. 

Commodity trading is essential to a stock trader’s strategy. As wheat are usually bought by few because of its fundamental quality, stock traders are taking advantage on existing small price movements which results in the supply and demand. Basically, stock traders are concerned with:

Price patterns – In order to forecast future price movements, stock traders will track the previous price history. It is known as a technical analysis.

Supply and demand – Traders are eyeing on their trades intra-day in order to see the price movement and the reason behind.  

Market emotion – Traders are playing to what investors fear by means of fading techniques, in which a bet is held against the crowd after a large movement takes place.

Trader support – Market makers are regarded as one of the largest types of traders. These traders are primarily hired in order to provide liquidity by means of trading rapidly.

Generally, the provider of liquidity for investors are traders. They are taking the other end of their trades frequently. Either trades are executed through market making or fading, traders serves as an important part of the marketplace.

Furthermore, traders and investors both play an important role in order for the market to work perfectly. Without traders, there would be no liquidity for investors on which to buy and sell shares. Without investors, there would be no basis for traders on which to buy and sell. The financial markets today are formed by the combination of the two.

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