4 Types of Forex Traders

by Candice Larson Do your best! The Forex market is the largest market in the world. It is the market where currencies are traded. Each day, over 4 trillion dollars are exchanged. Forex trading allows you to speculate on the changes in currency strengths over time, trading currencies and buying or selling one against the other. It is a global market, incredibly liquid, with an immense daily trading volume. As is the case with many investments, Forex trading is not for the faint of heart or the inexperienced trader.

The forex market is worldwide so trading is pretty much continuous as long as there's a market open somewhere in the world. Before entering into forex trading, you must know the types of traders and check out which will fit to your lifestyle:

The Scalper

Scalpers hold onto for a few seconds to a few minutes at the most. Their main objective is to grab very small amounts of pips as many times as they can throughout the busiest times of the day.

The Day Trader

A day trader will trade for the day. These are market participants that will usually avoid holding anything after the session close and will trade in a high-volume fashion. Short-term trader will generally aim for a quick turnover rate on one or more trades, anywhere from 10- to 100-times the normal transaction size.

In addition, day traders tend to rely more on technical trading patterns and volatile pairs to make their profits. Although a long-term fundamental bias can be helpful, these professionals are looking for opportunities in the short term.

The Position Trader

The position trader differs mainly in his or her perspective of the market. Instead of monitoring short-term market movements like the day and swing style, these traders tend to look at a longer term plan. Position strategies span days, weeks, months or even years. As a result, traders will look at technical formations but will more than likely adhere strictly to longer term fundamental models and opportunities.

Position traders are those that have trades that last for several weeks, months, or even years. These traders know that fundamental themes will be the predominant factor when analyzing the markets and therefore make their trading decisions based on them.

The Swing Trader

They are for those people that like to hold on to trades for several days at a time. These types of traders can’t monitor their charts throughout the day so they dedicate a couple hours analyzing the market every night to make sound trading decisions. Swing traders will sometimes hold positions for a couple of hours, maybe even days or longer, in order to call a turn in the market.

Compared to the day trader, they are looking to profit from an entry into the market, hoping the change in direction will help his or her position. Timing is more important in a swing trader's strategy compared to a day trader.

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Created on Dec 11th 2017 02:21. Viewed 993 times.

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