The Different Types of Online Trading and Their Benefits

Nowadays, people are making money right from the comfort of their homes since the advent of the internet. The internet has opened up a host of opportunities for everyone, and especially due to the fact that almost everything can be done on the internet. From shopping to gathering information, the internet has become a gem. This also includes making money. There are many ways that people make money online, some of them including blogging, affiliate marketing, trading, online merchants, gambling, and a host of other ways. In this article, we are going to focus on the different types of online trading and their benefits. This could include trading in stocks, money, and other things, with the sole aim of making profits. One needs to have capital that they will invest into the business, and they have to be very knowledgeable of the market or else they could end up making huge losses.

The Different Types of Online Trading and Their Benefits

Day Trading

Day trading involves buying and selling of securities on the same day, and there are different types of day trades. Some of the most common day trading strategies include:

  • Price Action Trading
  • Scalping
  • Rebate Trading
  • Arbitrage
  • Momentum Day Trading
  • Market Making
  • News Trading/Playing
  • Pattern Trading

Benefits of Day Trading – with the advent of online trading CFD’s people have the opportunity to make good money within short periods, although that will depend on their research and accuracy when buying and selling the securities.

Position Trading

With position trading, traders buy and hold the securities for longer periods of time, even taking months. Extensive market research has to be done, and traders need to predict what the markets will be like in the future.

Benefits of Position Trading – this is one of the best ways to invest your money if you have access to accurate facts and future trends.

Swing Trading

Swing trading is trading that takes advantage of price swings during certain trends, and the trades can be kept for more than a day so as to maximize the gains as the trends pick momentum. The trader needs to research and the trade depends on their accuracy.

Benefits of Swing Trading – those that are good at research and have accurate foresights could make a lot of money from the volatility of the trades.


In scalping, traders monetize on gaps created by bidding and asking spreads and order flows. The profit is made off from a selling price that is higher than the spread or buying price of a security. This is a short term strategy, and this minimizes the risks that are involved. The amounts used and profits are also smaller and more frequent.

Benefits of Scalping – lower profit margins but they can add up quickly due to the frequency. It requires less analysis.

Online CFD Trading

Otherwise known as Contracts for Difference, the traders get to speculate on how different stocks are moving on the market as long as buy the right to speculate on the market price change in the future.

Benefits of Trading CFD – It’s a high risk trade but thanks to many online services dedicated to that type of service, it is easier to trade and the returns could be worth it.

Calendar Spread Options

This involves buying longer term security options and selling an equal number of shorter term options of the same securities at the same price. Calendar spread options are low risk neutral strategy that bank on time to profit.


Online trading is something that is gaining traction every single day, and when it is done the right way, one can make a lot of money off it. One of the tricks is to do your research properly.