*Left: Warren Buffett. Right: George Soros.

Welcome to Module 1, Part 3 of Trading Foundations: Your Starting Point, a 4 part accelerator series to help you understand how to read price, trends, and momentum.

Most people start trading by asking:

What’s the best setup? What’s the best strategy? What stock should I trade?

But a more useful first question might be:

What kind of trader do I even want to be?

There’s no single “right” way to trade. And what works for someone else, whether it’s a full-time trader with $250K or a part-time side hustler with $2K, may not work for you. Your ideal trading style should fit your personality, your schedule, and your finances.

It should also fit your tax situation and your energy bandwidth. Some styles require you to be glued to the screen all day. Others don’t. Some styles are more capital-intensive. Some rack up more short-term taxes.

This post walks through the four most common types of traders, and ends with something most people skip over: how to choose your starting point in a way that sets you up to succeed.

🧠 1. Scalping

• Timeframe: Seconds to minutes

• Capital needed: ~$2,000–$25,000+ depending on market (see below)

• Tax impact: 100% short-term capital gains

• Best fit for: Process-driven, fast thinkers with high discipline

Scalping is the fastest and most intense trading style. You’re entering and exiting quickly, sometimes in seconds, trying to capitalize on tiny price movements. It’s all about speed, precision, and repetition.

This style demands full concentration and emotional detachment. You’re making fast decisions under pressure, often without time to second-guess.

Personality fit: Scalping suits people who are highly focused, decisive, emotionally steady, and comfortable under pressure. If you’re easily distracted or tend to overthink, this probably isn’t your style.

Capital Needed:

• Stocks: $25K+ to avoid PDT rule; under $25K = very limited

• Options: $2K–$10K (but spreads and slippage are risky)

• Futures: $500–$2K+ using micro contracts (MES, MNQ) or prop firms like TopStep (this is highly recommended to get practice in before risking your own capital)

Most traders are better off building skills on slower timeframes before attempting scalping. This is a style you grow into, not one you start with.

⚡ 2. Day Trading

• Timeframe: Minutes to a few hours

• Capital needed: ~$5K+ recommended (more for options or PDT flexibility)

• Tax impact: Short-term gains

• Best fit for: Focused, analytical people with flexible schedules

Day trading is slightly slower than scalping, but still requires you to be fully present during market hours. Trades are opened and closed the same day, avoiding overnight risk.

Personality fit: Suits those who enjoy analyzing patterns, reacting to price action, and want the structure of daily trading with a defined “clock-out” time.

Capital Needed:

• Stocks: Ideally $25K+ (to avoid PDT limitations)

• Options: $3K–$10K for flexibility with spreads and scaling

• Futures: $1K+ if trading micros; higher for full-size contracts

Day trading offers clean start then end sessions, but it does require capital to manage risk well. Stocks and options accounts under $25K are subject to the Pattern Day Trader rule, which limits active trading unless you’re using a cash account.

One way around PDT: trading futures (like ES, MES, NQ), which aren’t subject to PDT restrictions. That makes them popular for day traders looking for more flexibility with smaller accounts.

⏳ 3. Swing Trading

• Timeframe: Days to weeks

• Capital needed: Flexible (can start with <$1K)

• Tax impact: Short-term gains unless held >1 year

• Best fit for: People who want flexibility without daily screen time

Swing trading is one of the most accessible styles for newer traders. You’re holding positions across several days or weeks, aiming to catch trend-based moves.

It’s great if you want to trade part time, still focus on quality setups, and give your trades room to develop without constant monitoring.

Personality fit: Suits thoughtful, patient people who prefer planning over reacting—and want to avoid burnout or overtrading.

Capital needed:

• Stocks: Can start with as little as $500–$1K using fractional shares

• Options: $2K–$5K recommended

• LEAPs & premium strategies: $5K+ ideal

🔭 4. Position Trading / Long-Term Investing

• Timeframe: Weeks to years

• Capital needed: Flexible, though more helps with option-selling strategies

• Tax impact: Eligible for long-term capital gains (lower tax rate after 1 year)

This style is rooted in conviction and longer-term thinking. You’re holding positions based on fundamentals, macro trends, or valuation, and possibly layering in LEAPs, covered calls, or cash-secured puts if you have the capital.

It’s lower maintenance, but still requires clarity and commitment. You’ll experience drawdowns, market volatility, and narrative shifts, and need to hold steady through all of it.

Long-term positions offer the most tax efficiency, and the most psychological resilience.

Best for you if: You prefer zoomed out thinking, want to reduce screen time, and care more about wealth building than market timing.

Capital needed:

• Buy-and-hold stocks: Any amount (even <$100 with fractional shares)

• Cash-secured puts or covered calls: $5K–$50K+ depending on ticker

• Tax impact: Long-term capital gains eligible after 1 year (lower tax rate)

• Best fit for: Strategic thinkers focused on wealth-building over time

Long-term strategies don’t require a big account to get started—but the more capital you have, the more tools you can use (like selling options for income).

🔁 The Strategy: Start Slow, Then Scale Into Speed

There’s a lot of hype around fast paced styles like scalping and day trading. They feel exciting, and the potential for quick wins can be tempting. But for most people, that speed is also where mistakes compound.

What I’ve found for myself and many others is that it’s much easier to build confidence and consistency when you start slower and more structured.

That’s exactly how I approached it.

I started with long term investing, then layered in swing trading once I understood price action and risk management. Because I focused on higher timeframes first, I was able to become consistently profitable early on without getting overwhelmed by the pressure of rapid decisions or overtrading.