Different Types of Traders
Different types of traders, which type of trader ate you? Everyone wants to be successful, and no one wants to lose. But how successful can you be? How much can you win or lose? The answer depends on the type of trader you are and the way you approach trading. If you know your trading type, then you can better understand how much money you’re likely to make or lose in any given trading period. If you don’t know your type, then this article will help you find out which category you fall into so that you can improve your trade results and achieve greater success with each new trading period. At the end of this blog, you will understand the type of trader and from there you will choose which is the most suitable for you.
Here are the 4 Different Types of Traders
Are you a scalper? The one who holds for a few seconds to a few minutes. Your main objective is to capture small amounts of pips for a short period of time. Your main purpose is to make plenty of trades with a small profit gain on a daily basis.
Your strategy is to enter and exit trades quickly. This is a very risky approach since most of your trades will be losing ones and you should not try it if you are a beginner. Sometimes, there can be highly volatile price swings within minutes or seconds due to market panic or malfunctioning trading platforms that might lead to heavy losses. You may find yourself exiting with fewer profits than expected. It’s important to keep in mind the long-term goal when deciding whether or not to close out a trade early. There is no such thing as an unprofitable trade when you have the right mindset.
Are you a day trader? The one who holds the trade within the day only. Your main objective is to buy and sell within the day with multiple trades. At the end of the day, you closed your trade with a profit or a loss seeking a small profit that compounds over time.
Day traders are emotional people because they watch their accounts like a hawk waiting for price movement so they can buy low sell high or vice versa. The problem is that as a day trader your emotions will get in your way if you do not master them and become cold as ice.
When swing trading, you are holding your trade for a few days to weeks. Some traders can go as long as a few months before exiting a trade. The main objective is that you are capturing short term market swings where it can go in both directions like trend trading, counter trend trading, breakout trading, or momentum trading. It doesn’t matter which direction because that all depends on your trading strategy and risk tolerance, but you know when to exit a trade when it reaches a predetermined percentage gain or loss.
Are you a position trader? The one who is willing to hold their trades for multiple weeks to months and it can hold even up to years. Then, position trading is for you meaning you are focused on the long-term price movements of the market. You aim to gain big profits based on the major market movements. You will also mix the technical and fundamental analysis to decide when and where to buy and sell.
Even though you do not need to monitor each day, position trading is no less difficult than scalping and swing trading. Position traders have to pay attention to market news daily and need to have a very high-risk tolerance. Because of its complexity, many traders often lose in position trading.
Now that you know what the types of traders are. It is up to you to pick the type of trader that matches your style and personality. Remember that you must never be 100% committed to one type, just find your favorites or the one that fits you best. Mix them up and try to improve on what you can do to achieve success in trading. Choose well, trader
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