Forex Trader Types
In the Forex market, traders use various strategies to help strengthen their position in the market and ensure significant profits.
But each trader has his own trading style, influenced by his behavior, market knowledge, level of intelligence, instincts and awareness of the forex economic calendar and other technical aspects of currency trading.
All these, interconnected, form their specific type of negotiation, which formulates their special technique to approach this business.
Here are the four basic types of traders and how to use them to your advantage:
1 - The “Scalper ”
A few seconds to a few minutes tradesat most are more than enough to satisfy this type of trader. They they act fast and like to open buy / sell positions during the busiest times of the day, often in terms of number of positions.
Although this strategy is generally not suitable for beginners because it requires extensive market knowledge and risk assessment, there are articles that can help you build the confidence you need to do so if you think this strategy fits your personality well.
2 - The “Day Trader"
This type of trader prefers short term results. They choose to trade from the beginning of the day and end the session with profit or loss. That means they enter and exit the market during 1 trading session.
Because they want a fast turnover rate, usually invest with a high volume of capital, from 10x to 100x of normal transaction value, and focus more on technical trading patterns. Although this suggests higher returns, the "day trader" faces more risks to make a profit in a short time.
3 - The “Swing trader"
The "Swing Trader”Is characteristically the one that often Holds buy / sell positions for a couple of hours or more, and waits longer to receive a return from the market. This is a medium-term investment compared to previous types.
This type of trader usually waits for a change of direction to see if she can change the results, and "swings" back to the other side using a variety of technical analysis tools, such as Fibonacci retractions and extensions.
For this reason, it takes a while before they reach a specific business decision. In addition, they do not prioritize monitoring the chart daily. Instead they spend just a few hours analyzing the movement in the market.
4 - The “Position Trader"
Market movements to short term do not excite the “Position trader".
This type of trader usually hold positions much longer than the three types previously spoken.
Usually take days, weeks, months or even years closing a position, and tend to focus on a long-term plan. For them, it is essential to use fundamental factors and technical analysis to visualize a currency and see progress. They make decisions based on these two aspects.
Now that you have an idea about the types of forex traders, it is time to use this knowledge to understand which type of trader best suits your personality and knowledge and to define your strategy and use it to your advantage. No matter what type of trader you are, it is important to keep abreast of 24 signals and news hours a day, 7 days a week, to get a complete picture of the opportunities and risks you face along the way.