Who are the Different Types of Traders in the Market?

Active trading is a strategy that involves attempting to outperform the market by recognizing and timing lucrative trades, often during short waiting periods. A market order is an instruction to buy or sell a stock at the best available price on the market. This type of order guarantees execution, but not a specific price. Market orders are ideal when the main goal is to execute the trade immediately.

Generally, a market order is suitable when you think that a stock has the right cost, when you are certain that you want to complete your order, or when you need immediate execution. The stock market is the most active market for intraday trading, particularly during the early hours and the last hour of trading. Between market sessions, numerous factors can influence the price of a stock, such as the release of results, company news or economic data, or unexpected events that affect an entire industry, sector or the market as a whole. A stop sell order is issued with a stop price lower than the current market price; if the stock falls to (or trades below) the stop price, the sell stop order is activated and becomes a market order that is executed at the current market price.

A market order placed when the markets are closed will be executed at the next market opening, which could be significantly higher or lower than its previous close. Day traders also trade in the foreign exchange market (also known as forex) and in futures markets, where commodities are mainly traded. Futures markets, as well as general stock indices, are monitored as traders form opinions about the direction in which they expect the market to move. If the stock reaches the limit price, the order becomes a market order and is completed at the next available market price.

Some traders work only in one or two markets (for example, two stocks or two electronic minis), and they open these charts and apply their chosen technical indicators to see what is happening in those markets.