Types of trading Essay
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There are several types of trading styles that persons seeking to profit from short term trades in the market may wish to use. Here is a brief description of the most widely used short term trading styles.
Day traders buy and sell stocks throughout the day in the hope that the price of the stocks will fluctuate in value during the day, allowing them to earn quick profits. A day trader will hold a stock anywhere from a few seconds to a few hours, but will always square off all of those stocks before the close of each day.
The day trader does not own any positions at the close of any day therefore immune to overnight risks. The objective of day trading is to quickly get in and out of any particular stock for a profit on an intra-day basis.
Day trading can be further subdivided into a number of styles, including:
Scalpers: This style of day trading involves the rapid and repeated buying and selling of a large volume of stocks within seconds or minutes. The objective is to earn a small per share profit on each transaction while minimizing the risk.
Momentum Traders: This style of day trading involves identifying and trading stocks that are in a moving pattern during the day, in an attempt to buy such stocks at bottoms and sell at tops.
The principal difference between day trading and swing trading is that swing traders will normally have a slightly longer time horizon than day traders for holding a position in a stock. As is the case with day traders, swing traders also attempt to predict the short term fluctuation in a stock’s price. However, swing traders are willing to hold stocks for more than one day, if necessary, to give the stock price some time to move or to capture additional momentum in the stock’s price. Swing traders will generally hold on to their stock positions anywhere from a few hours to several days.
Swing trading has the capability of providing higher returns than day trading. However, unlike day traders who liquidate their positions at the end of each day, swing traders assume overnight risk. There are some significant risks in carrying positions overnight. For example news events and earnings warnings announced after the closing bell can result in large, unexpected and possibly adverse changes to a stock’s price.
Position trading is similar to swing trading, but with a longer time horizon. Position traders hold stocks for a time period anywhere from one day to several weeks or months. These traders seek to identify stocks where the technical trends suggest a possible large movement in price is likely to occur, but which may not be fully played out for several weeks or months.
Online trading is not really properly described as a trading style. Rather, online trading is simply a term that refers to the medium used to enter and execute trades. Online traders, which can include long term investors, as well as day, swing and position traders, use either an Internet connection or a direct access online trading platform to access and execute trades with Web based brokers.
Historically, the Philippines have been an important centre for commerce for centuries for its ethnic minority, namely, the Chinese who were also its first occupants. The archipelago has also been visited by Arabs and Indians for the purpose of trading in the first and early second millennium. As of 21st century, the country is member in several international trade organizations including the APEC, ASEAN and WTO
Since 1980s, the Philippines have opened their economy to foreign markets, and established a network of free trade agreements with several countries. The United States is one of the Philippines top trading partner. In 2010, according to US Department of Commerce dad, trade between the Philippines and US amounts to US$15.4 billion. US is also the Philippines largest foreign investor, with foreign direct investment close to US$6 billion at the end of 2009. Under the new Aquino administration, the government plans to open up the country to more foreign investment in industries such as business processing operations, mining and tourism. However, this move may be hindered by restrictions such a prohibition of foreign ownership of land and public utilities.
List of the Philippines FTAs
ASEAN – China FTA
ASEAN – Japan CEP
ASEAN – Korea FTA
ASEAN – ANZ FTA
ASEAN – India FTA
ASEAN – EU FTA
Philippines’ Import and Export Indicators and Statistics at a Glance (2010) Total value of exports: US$50.72 billion
Primary exports – commodities: semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, fruits Primary exports partners: US (17.6 percent of total exports), Japan (16.2 percent), Netherlands (9.8 percent), Hong Kong (8.6 percent), China (7.7 percent), Germany (6.5 percent), Singapore (6.2 percent), South Korea (4.8 percent) Total value of imports: US$59.9 billion
Primary imports – commodities: electronic products, mineral fuels, machinery and transport equipment, iron and steel, textile fabrics, grains, chemicals, plastic Primary imports partners: Japan (12.5 percent of total imports), US (12 percent), China (8.8 percent), Singapore (8.7 percent), South Korea (7.9 percent), Taiwan (7.1 percent), Thailand (5.7 percent)
JAPAN CORNERS 13.2 PERCENT OF RP’s TOTAL TRADE
The Philippines top ten trading partners for the first semester of 2011 posted a total trade value of $41.570 billion or 75.2 percent of the total. This comprised a total export receipt of $20.241 billion or 81.8 percent of the total exports and total import bill of $21.329 billion or 69.9 percent of the total imports.
Japan was the country’s top trading partner in the first semester of 2011, accounting for a total trade worth $7.285 billion or 13.2 percent of the country’s total trade. Exports to Japan totaled $4.290 billion while imports were valued at $2.995 billion, posting a trade surplus of $1.296 billion (Table 4). Electronic Products got a large share of 42.3 percent of the total exports valued at $1.813 billion, followed by Woodcraft and Furniture at $760.09 million or 17.7 percent share of the total exports. Majority of the imported products from Japan were Electronic Products billed at $1.135 billion or 37.9 percent of the total imports and Industrial Machinery and Equipment with $369.77 million or 12.3 percent share of the total imports (Tables 5 and 6).
USA followed the country’s second largest trading partner in the first semester of 2011 with total trade worth $7.121 billion or 12.9 percent of the total trade. Export receipts from USA stood at $3.668 billion while payments for imports were valued at $3.452 billion, resulting to $215.98 million trade surplus (Table 4). The biggest receipt came from Electronic Products at $1.384 billion or 37.7 percent of the country’s exports to USA. Articles of Apparel and Clothing Accessories followed with total receipts of $639.32 million or 17.4 percent of the total exports to the country. Imported goods purchased from USA consisted of Electronic Products worth $2.018 billion or 58.4 percent of the country’s total imports. Cereals and Cereal Preparations second highest imports from USA with $226.16 million or a share of 6.6 percent (Tables 5 and 6).
People’s Republic of China came third accounting for $5.751 billion or 10.4 percent of the total trade in the first semester of 2011. Receipts from exports to China were valued at $2.898 billion while payment for imports totaled to $2.853 billion, reflecting a trade surplus of $45.58 million (Table 4). The bulk of exports came from Electronic Products worth $1.950 billion or 67.3 percent of the total exports to the country and from Cathodes and Sections of Cathodes of Refined Copper with $127.54 million or 4.4 percent share. Major imports from China were Electronic Products with purchases worth $674.73 million or 23.7 percent of the total; Iron and Steel valued at $204.84 million or 7.2 percent of the total; and Industrial Machinery and Equipment with payments with $193.20 million or 6.8 percent of the total (Tables 5 and 6).
Singapore emerged as the fourth largest trading partner of the country for the first semester of 2011 with a total trade amounting to $5.305 billion or a share of 9.6 percent to total trade. Registered export receipts were valued at $2.588 billion while import bill reached $2.717 billion, resulting to a trade deficit of $128.28 million (Table 4). Electronic Products and Petroleum Products were the country’s major exports to Singapore with earnings of $1.921 billion or 74.2 percent share and $281.74 million or 10.9 percent of the total exports, respectively. Similarly, Electronic Products with import bill of $1.206 billion or 44.4 percent share, and Mineral Fuels, Lubricants and Related Materials worth $711.91 million or 26.2 percent share were the major imports from Singapore (Tables 5 and 6).