Title: What Type of Trader Are You?
Headings: What Type of Trader Are You?
What Type of Trader Are You?
Key Takeaways
Fundamental Trader
Noise Trader
Sentiment Trader
Market Timer
Arbitrage Trader
The Bottom Line

Content: Some trading strategies are based on split-second decisions and others that are based on trends or factors that play out over the course of a day, the fundamentals may not change for months or even years. At the shorter end of the spectrum, for example, the release of a firm’s quarterly financial statements can provide insight into whether or not the firm is improving its financial health or position in the marketplace. Changes (or lack of changes) can serve as signals to trade. Of course, a press release announcing bad news could change the fundamentals in an instant. Fundamental trading has a real appeal to many investors because it is based on logic and facts. Of course, unearthing and interpreting those facts is a time consuming, research-intensive effort. Another challenge comes in the form of the financial markets themselves, which do not always behave in logical ways (especially in the short term) despite reams of data suggesting that they should. Noise Trader
Noise trading refers to a style of investing in which decisions to buy and sell are made without the use of fundamental data specific to the company that issued the securities that are being bought or sold. Noise traders generally make short-term trades to profit from various economic trends. While technical analysis of statistics generated by market activity, such as past prices and volume, provides some insight into patterns that can suggest future market activity and direction, noise traders often have poor timing and over-react to both good and bad news.