There are different types of investors who take control of their own destiny and trade stocks online. These types can be defined across many variables including their investing goals and their investment time frame.

Where you fall within these two categories will determine which type of investor you are. And which type of investor you are determine the investing strategies you use as well as the tools that will help you the most. Here is one way to define the categories:

Investing Time frame: Long-Term (1-30 Years) Earn returns superior to savings accounts, CD’s, money market funds, etc.

Investing Goal:

Think of this investor type as the traditional investor. Their goal is to continually add money to their principal over time and invest it a low-risk way. This is the strategy someone would use to build up their retirement account. Their investment choices would be made up of blue-chip stocks, other NYSE stocks and mutual funds. If they make 15% per year, they are happy because over a period of years, this rather small profit will build on itself and create a multiple of the initial principal.

Investing Time frame: Intermediate-Term (Days to Weeks) Earn a meaningful profit to supplement current income streams

Investing Goal:

Think of this investor type as the part-time trader who trades stocks as a way to generate a second income stream. With all the online tools available, an average person can work with a very small initial fund (think $500 as an example) and conduct their own research and place their own trades with the hope of doubling that over weeks or months. If you can do it once, you can do it again and pretty soon you have made a significant gain. This investor will trade in penny stocks or other small cap issues and options because they have the potential for large percentage gains in a short period of time.

Investing Time frame: Short-Term (Minutes to Hours) Earn a Consistent Profit to Serve as a Primary Income Source

Investing Goal:

This investor type is the day-trader. Their goal is to trade full-time and generate enough income to pay the bills, replacing their regular job. This is very risky for lots of different reasons and is not for the casual investor. The folks who can make it here are pros and very sophisticated in their ability to spot trends, act on them quickly and get out fast. They will trade all variations of stocks as well as more advanced vehicles.

If you are an Intermediate-term trader, there are many resources available on the Internet that can give you a fast and easy way to get good stock information. Finding the right sources will save you lots of time and, more importantly, help you generate significant profits. So just what is “significant profits”? That is up to you and your investing style and depends on how much money you have to invest, how much time you will spend finding good stocks and how much time you will devote to placing trades and tracking their progress.

Once you determine the type of investing you want to do, it is time to select the best online broker for your needs.