Q. “Hi Timon, I am 55 years old and I have more time on my hands in the day. I am looking to take trading more seriously where I can take a few trades a day. I don’t mind holding positions overnight. Could you please let me know which types of trading I should look into?”

A. Hi C* absolutely.

There are four types of trading to generate wealth

I would like to explain all four so you can get an idea on what you can expect which each one.

Method #1: Classical Investing (Long-term)

The slowest form of trading is investing and buying different stocks and holding them for a period of time.

You’ll buy a position a at a low price with the anticipation that the price will go up, where you’ll sell it at a higher price for a profit.

Your investing time frame could typically be 5 to 10 years and your goal may be to beat inflation by +5 to 10%

Method #2: Position Trading (Medium term)

The next form of trading is what I call a medium term.

This is where you’ll look to buy (go long) and sell (go short) different markets.

Whether the market moves up or down, you’ll look to trade using derivatives (CFDs, spread or Futures).

With Position Trading, it targets longer-term trends that can last from a few days to a couple of months.

You’ll target a return of say 12% to 36% per year.

A good way to find trades like this is to use the 4 hour or daily time frames to find moderate risk and high probability positions.

Method #3: Day Trading (Short term)

The third form of trading is also uses derivatives but you’ll hold your positions for one to a few days.

The goal to target here would be to generate returns of 36% – 60% per year.

Day Traders often look at time frames from 5 minute to 15 minutes, to find higher risk and higher reward type positions.

Both Pickpocket Trader and Red Hot Trader focus on this kind of trading.

Method #4: Intraday Trading

Intraday trading, as the fourth form of trading, presents the fastest but riskiest method to trade.

Intraday is self explanatory. You will open and close the trade within the day.

Typically you’ll use 1 minute to 5 minute charts to find trades.

I know some traders who have been able to grow their portfolios from 60% to 500% per year.

But with this style it is very time consuming, stressful and will require a lot of your energy.

So what type of trading do I focus on?

I focus more on Day Trading to boost my portfolio gains.And this is the kind of strategy I use for my service Red Hot Trader.