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Monday, October 15, 2012 3:47:41 PM
Different Strokes for Different Folks
Investors - An individual who commits money to investment products with the expectation of financial return. Generally, the primary concern of an investor is to minimize risk while maximizing return, as opposed to a speculator, who is willing to accept a higher level of risk in the hopes of collecting higher-than-average profits.
Traders - One who buys and sells securities for his/her personal account, not on behalf of clients.
1. Trader - An investor who holds stocks and securities for a short period of time (a few minutes, hours or days). The goal is to profit from short-term gains in the market. The stock selection is generally based on technical analysis or charting which relate only to the stock price rather than a fundamental evaluation of the company as a business. The IRS offers some tax benefits to traders: they can deduct their interest expense without itemizing, and seminar costs can be deducted as well as home office expenses in connection with investing.
2. Day-traders - Very active stock trader who holds positions for a very short time and makes several trades each day. Day traders are individuals who are trying to make a career out of buying and selling stocks very quickly, often making dozens of trades in a single day and generally closing all positions at the end of each day. Day trading can be costly, since the commissions and the bid/ask spread add up when there are so many transactions.
3. Breakout trader - Stock trader who relies on technical analysis when looking for trading opportunities. Breakout traders look for situations in the market where the asset price will move substantially in a short period of time, and then take a long position when the price of an asset breaks through a level of resistance, and as short position when it breaks below the level of support.
4. Pump and Dump traders - An investment scheme, sometimes illegal, in which false recommendations are made concerning a stock's future performance in order to drive share prices up. Investors making the false recommendations intend to sell their shares when the share price reaches a higher level.
5. MoMo Traders - Slang for an investment made based only on momentum, without any concern for fundamentals. An investor who follows this strategy believes that stocks which have recently gone up are more likely to continue to go up than stocks which have recently gone down. The primary measure of momentum is relative strength.
any newbie that boasts being long in a pennystock, needs ta be slapped up-side their head ![color=red][/color]
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