The Main Types of Traders in Forex – Overview Report
Traders in Forex – FX traders are distinguished for the most part by the duration of most of the transactions they carry out. Here we will reach an agreement with the most common. There are four main types of forex traders:
- The Scalper (reseller)
- The Day Trader
- The Swing Trader
- The Position Trader
- The fastest
Scalpers are “low point” traders who stay for a few seconds to a few minutes at most. The trading strategies that traders of this type use (scalping) are based on the orders closed when the minimum income is reached. Scalpers’ transactions usually have a short duration. Some even go so far as to implement automated systems (i.e. special robot programs embedded in trading terminals) that carry out dozens or even hundreds of transactions per minute. Their main objective is to walk away with very small amounts as many times as they can throughout the busiest hours of the day.
Calmly, but nothing tomorrow
Not all traders can take advantage of short-term price chart movements. Therefore, many traders prefer to build their strategies based on longer timeframes than seconds and minutes. A category keeps their transactions from a few minutes to a few hours, but they prefer not to transfer the orders to the next day. That is, they work “within the day, that’s why they are also called “intraday”. On the one hand, this strategy is quite suitable for beginners, as the necessary capital requirements are modest (unlike long-term trading), and, at the same time, it does not require immense patience and virtuous ability to spot minute changes in market conditions like in the case of scalping. On the other hand, it will be necessary to be aware of the economic and political events every day to adjust the transactions according to the breaking news.
Slow but sure
Swing traders are the ones who prefer to hold trades for several days. These types of traders cannot follow their charts throughout the day. Therefore, they spend a couple of hours analyzing the market to make the right decisions. “Position” traders are those who carry out trades for several weeks, months or even years. These traders know that fundamental themes and trends will be the predominant factor in analyzing the markets and therefore make their trading decisions.
Trading strategies depend not only on time but also on the principles of the approach. Thus, strategists and intuitive opt for detailed analysis or act by intuition.
Adjusting to Your Personality
You might read about different policies online or even learn them from a friend. While this is not a wrong approach, you will never replicate the same results. It is because we are all different. If you ask two people to look at the same chart, you might acquire a completely different opinion.
Through the time you venture into trading, you’ll likely have some life experience under your belt. So, before you promise a strategy, it is necessary to be reflective. After all, there are several strategies out there, but there is only one of you.
Who Can Trade Forex?
Furthermost, nonprofessionals who trade forex are not doing it for income. Those are tourists who exchange their money through travelling abroad. Yet, those transactions are not projected, but necessary, and high spreads make it close to impossible to profit.
Whereas adults can trade forex, retail traders type less than 6% of the market ($360 billion in daily volume). Thus, forex trading remains primarily a game between institutions that often act as buyers, sellers, and intermediaries.