Forex is an open, international, regulated, and fair playing market. Though it’s a level playing field, the process of money making differs, and not everyone follows the same techniques. The results also vary. Some people earn a lot, and some people get it moderate while some people quit as losers.
The behavior of the traders, the knowledge they gained about the market, the intelligence level, the instincts with which they work, the awareness about forex economic calendar and other aspects of currency trading are the vital factors which help in forming the trading strategies.
Traders come under many categories based on the strategies they follow. There are four main types of traders. Let’s have a look at them.
Scalpers
| Obviously, as the name intends, these traders want to make quick bucks. These traders don’t hold positions for longer and what they need is a few seconds to few minutes. They like to trade in the busiest time of the market, make small pips and try to repeat it in a day. It is not generally suitable for the new entrants as it requires in-depth market knowledge and robust risk management. Help is available online even for the newbies to develop the scalper’s strategy and do the business confidently. But to suit the fast in and out strategy, you should have a reliable platform to work with. |
Day Traders
| Traders who open and close their positions on the same day are day traders. They don’t hold the positions and carry it to the next day. They gain or lose on the same day and don’t hold the position overnight. Day traders tend to finish the trades within the session and usually trade in high volumes. To get more profit from a small swing, the day traders aim for quick turn over rate from one or more trades. This type of traders use a shorter version of time frame charts like one minute, five minutes or 15 minutes period and rely more on technical analysis. |
Swing Traders
| The traders who hold onto the positions for several days are swing traders. Swing traders don’t spend much time in monitoring the market, and they regularly spend some hours and try to make sound decisions. These traders believe in their strategy and try to get profit from every entry and hold the system for a longer time than for a few hours like the day traders do. Like day traders, swing traders also rely on fundamental analysis. To say more about the swing traders, they don’t worry about the trend and hope for the change in direction or the ‘swing’ back. |
Position Traders
| Traders who rely on the positions and hold on them for a long time are position traders. The traders use the fundamental analysis and after choosing the positions, wait patiently for a long time, which extend even up to years. Though the position traders look at the technical analysis, they firmly adhere to fundamental analysis and consider economy, major governmental decisions, and interest rates to make the decisions about entry and exit of the trades. The position traders prefer major currencies and emerging favorites. |