Happy Monday, traders…
When you’re first starting out in the markets, you’ll hear people say that you need to find your edge, your style, your unique perspective on trading…
But in reality, no trading style works at all times, no pattern is infinite, and no setup lasts forever…
To win as an options trader, you must continuously adapt your style based on your experience and the ever-changing dynamics of the stock market.
This isn’t something to shy away from. The variety of trading styles available is actually one of the biggest advantages of trading (especially if you’re using options).
By developing an individual style that fits your personality, account size, and risk tolerance … you can potentially corner a niche that other traders aren’t exploiting.
In other words, by finding your style, you might just carve out an edge for yourself, which is what every trader on the planet should strive toward.
With that in mind, here are eight popular trading styles that could help you find your edge…
Day Trading
Day trading means buying and selling stocks within the same day, often within hours (or even minutes).
The goal is to capture small price movements that happen during regular market hours. Day traders are glued to their screens, watching charts, price levels, and volume closely.
They tend to rely on technical analysis, and many use leverage (via options) to magnify small gains.
While it offers the chance for fast profits, it also comes with high stress and the risk of quick losses.
Swing Trading
Swing trading takes a slightly slower approach.
Here, traders hold positions for a few days or even a couple of weeks. The idea is to catch “swings” in price between support and resistance levels.
Swing traders often use both technical and fundamental analysis, looking for chart patterns like breakouts and pullbacks.
This style fits better for part-time traders who can’t watch the market all day (but still want to be active).
It offers a balance — it’s fast enough to keep things interesting but slow enough to give you some breathing room.
And if you catch the right swing and hold it into a rally, those gains can potentially dwarf 99% of day trading profits.
Position Trading
Position trading is the longest-term approach of the bunch.
Position traders hold trades for months or even years, aiming to benefit from major price moves and long-term trends.
They pay less attention to daily price fluctuations and focus more on the big picture, like company fundamentals, economic cycles, or major market themes.
This style requires patience and a steady hand, as short-term volatility is part of the ride. It’s closer to long-term investing, but coupled with a trader’s mindset about when to enter and exit.
Momentum Trading
Momentum traders look for stocks making strong moves with heavy volume.
The goal is to ride the wave of momentum until it starts slowing. This style often overlaps with day or swing trading (since momentum doesn’t last forever).
Momentum traders rely heavily on technical indicators and charts, and they need to act fast when conditions change.
It can be exciting and rewarding, but it demands major “entry discipline” to avoid chasing moves too late.
Catalyst Trading
Catalyst traders focus on events that can spark big price moves, like earnings reports, FDA approvals, product launches, or economic news.
The goal is to trade the reaction to these events, which can cause sharp and fast-moving price changes.
This style requires doing homework ahead of time to understand the potential impact of a catalyst.
It can overlap with both day and swing trading depending on how long the move lasts. Being prepared and staying calm when the action hits are key here.
Scalping
Scalping is the fastest trading style.
Scalpers look to capture tiny price movements, often holding positions for just seconds or minutes.
They might make dozens or even hundreds of trades in a single day. This makes scalping less attractive for options traders, as premium and slippage can deteriorate the gains from hundreds of trades.
The focus is on high-probability, small-profit trades that add up over time. It demands lightning-fast decision-making and execution, plus very tight risk control.
I don’t recommend scalping to my students, but you should be aware of its existence.
Mean Reversion Trading
This style is based on the idea that prices tend to return to an average or “mean” over time.
When a stock moves too far away from that mean — either up or down — mean reversion traders look to take the opposite side, expecting a bounce back toward the average.
It requires a good grasp of technical indicators like moving averages, relative strength index (RSI), and key price levels to determine where the average is (and when the stock might head back there).
Smart Money Trading
Smart Money Trading follows the activity of large institutional players (hedge funds, mutual funds, pension funds, and big banks) whose bets can foreshadow massive moves.
Instead of starting with the chart, Smart Money traders look for big bets on the options chain — or even better, on my OMEN Scanner — to spot where the Smart Money is flowing.
This is my #1 trading style. Every day, I’m reading those footprints, watching flow, and using patterns like breakouts and pullbacks on strong volume to align with the momentum created by institutions.
This approach helps stack the odds in your favor by trading alongside the market’s most powerful players, not against them.
The Smart Money always knows something we don’t. All we have to do is follow it…
If you want access to my Smart Money strategy that achieved an 89% win-rate with a 72% average gain…*
From which the top 120 trades have ALL generated 100% or higher — with 27 soaring above 200%, and 12 exploding beyond 300%…*
Then NOW is the time to start using my OMEN System.
Join the great Danny Phee, TODAY, May 12 at 12:00 p.m. EST for a LIVE OMEN TRAINING SESSION.
Space is limited — Click here to reserve your seat.
Happy trading,
Ben Sturgill
*Past performance does not indicate future results
