Forex is the largest financial market in the world today. Its daily volume is more than 6 trillion dollars. Experienced traders and beginners can choose a trading schedule and applications that suit them best to trade successfully. So, there is a lot of money-making work in the Forex factory.
All traders can be divided into four main types.
- Day trader
- Swing trader
- Scalper
- Position trader.
Read on to find out which approach is right for you.
Day traders: Fast newcomers
Day traders usually work during the day, closing all their deals before nightfall. Therefore, they already have either a profit or a loss by the end of the day. In addition, day trading has a few other traits.
- The traders do not analyze data and pay attention to end-users.
- Large volumes are traded during the day.
- The market players work with high-speed transactions; therefore, a stable Internet connection is a must.
- They use volatile currencies (pound, yen), which can fluctuate greatly in a short time.
- Contrary to position trading, no planning is involved.
Scalpers: Playing low
In addition to day traders, there is another interesting category – scalpers. This type is very similar to the previous one but has some specific characteristics. Scalpers are intraday traders who effect deals within short time frames, sticking to fast, one or five-minute trades.
Scalpers tend to get numerous small wins instead of one-time big gains, as the very name implies. Such traders have their own short-term trading strategy and timing. This type of trading will work for people who are looking for adrenaline or just trying their hand at various strategies to find what suits them best.
How to Make Money With Binary Option TradingSwing traders: Minimizing risks
This type specializes in longer-term trades and can wait for a deal to be closed for several days or several weeks. The strategy is suitable for those who are ready to devote a couple of hours a day to analyzing the market and elaborating an informed decision. This is a job for an experienced trader, not a beginner.
Swing traders buy only rising stocks and sell only when the price growth stops. In addition, they have other distinctive features.
- Focus on global trends rather than daily fluctuations.
- Emphasis on temporary price increases to capitalize on the difference.
- Working with liquid currency pairs.
Swing trading involves the technical analysis of price movements, just like day trading. However, this type is less risky and can bring more profit than short-term trading. Yet, you need to understand and even feel the market to work with global trends profitably.
Position traders: Long perspective
Much like fans of the swing strategy from the above paragraph, position traders rely only on global trends in decision-making. It can take them from a few weeks to several years to close trades. They work with smaller volumes of shares, receiving large sums as a result.
Here are some of the main distinguishing features of position traders. They.
- Hold fewer trading positions, but in the long run.
- Well-informed on interest rates, national economies, global news, and market trends.
- Have no preferences in currencies, using even relatively young ones.
- Focus on long-term growing trends and fundamental stock analysis.
This type of trading requires less time than the previous ones. A trader needs up to 10 positions per year to achieve goals in position trading. This gives them a platform to explore all aspects and plan their actions carefully.
But this trading approach also comes with some risks, and you need to clearly understand if initially growing stocks continue to move up until the transaction is completed.
New types of traders on the Forex market
In addition to the main categories, there are other two important types of players in the market.
News traders
Such traders focus on international news only. This type of trading requires a good understanding of world politics, global economics, and the impact of news on currency markets. News trading is good for experienced traders who already know how to manage their assets and understand market trends.
Algorithmic traders
Traders of that type are directly related to technology. They deal with special software that gives a signal or opens a trade according to automatically set parameters.
Therefore, such trading can be fully automated, without any personal participation of a trader, or semi-automatic. Ready-made programs can be bought pre-set or programmed independently by taking into account personal wishes and needs.
Choose the best for you
Now you know about all the types of traders in the Forex market, and you can choose the one that is right for you. Do not try to mimic other traders or immediately jump at the strategies of experienced market players if you are just starting out. Each trader finds a strategy that is comfortable for them, so try different approaches gradually.
