Active trading has become a common strategy used not only by seasoned traders but also the relatively new ones as well. Active trading is characterized by the buying and selling of securities that are based by short term changes in price movements to realize profits. Active traders make use of different strategies in order to profit short term. Here are some of the common ones.

Day Trading

This is the most common active trading style to the point that people already consider it as another term for active trading. Just as the name implies, day traders follow the method of buying and selling securities within a single trading day. Positions are opened and closed usually on the same day. Although day trading is primarily used by professional and more experienced traders, the opening up of electronic trading has made it possible for even novice traders to make use of this trading strategy.

Swing Trading

Swing trading is also another active trading strategy that is usually based on trends. Swing traders usually look for an end of a trend and the possible start of another. It is during this time that price volatility may be experienced. Swing traders try to hold certain positions at these times to take advantage of the sudden price changes that happen. Swing trading may be differentiated from a day trading strategy in that is usually holds a position lasting longer than a day but shorter to be considered as a long term position.


Although the term may sometimes have a negative connotation to it, scalping is considered as an active trading strategy. This involves the buying and selling of securities in a relatively quick manner to profit from the difference between the bid and ask price. Scalpers usually take on several trades within the day and usually prefer markets with higher liquidity in order to make several trades within the trading day. Since the profits made are relatively small, the frequency of trades made within the day makes it a profitable option.