types of forex traders In 2021

types of forex traders at the very beginning of my forex trading career, when I first came across forex trading. I had no idea about what forex trading is, I just bought a course that promised me to make a lot of money from forex and that course was about scalping. So, I started implementing the strategy Even after working hard, I lost a huge amount of money with that strategy. and I had no idea why? At that time I was not aware that there are different styles in forex trading.

types of forex traders

As days passed I made my mind to pursue forex trading full time. So, I bought a lot of different courses from different successful traders. Then I got to know there are different styles in forex trading AND THEN I realized that I was a horse who used to plow on a farm. I realized that I am doing one big mistake from the start of the forex trading career and that mistake was choosing the wrong trading strategies.

It was like, I was a horse who was made to race but instead of that, I choose to plow on a farm. I was not doing what I was made for. This exact same thing might be happening to you right now. And you may be moving in the wrong direction. So just stay with me as I will explain to you what are the different types of trading strategies, why does it matter, and read this article till the end as I will give you a set of questions which will help you choose the right trading strategies for yourself.

There are different types of doctors, like general practitioners, neurologists, psychiatrists or surgeons, and many more. And there are different ways to become a doctor based on the type and also there is the different purpose of each one. In the same way, there are different trading strategies for each one of us.

There are 4 main types of forex trading strategies Scalping day trading swing trading and position-based trading.

Scalping is a trading strategy in which the traders use a 1 minute to 15 minutes timeframe to place a trade and profit from very small or minimal price movements. In day trading Traders open and close their trade in a single day and no trade is held overnight. Day trading is a trading style in which the traders use 30 minutes to a 4-hour timeframe to open a position and profit from medium price movements throughout the day.

In swing trading, the trader opens a position and keeps it running for days or weeks till its trade potential is reached. Swing traders mostly trade on timeframes higher than 4-hour. And Position trading is the type of trading style in which the trader opens a trade and keeps it running for weeks, months, or even years. Position traders mostly trade supply and demand on higher timeframe weekly and monthly charts.

These are the 4 types of trading strategies. There is nothing like one is better than another. All these 4 strategies are just different from each other. It all depends on which one suits you the most. Scalping is best for traders who can spend 4-5 hours straight and can make quick and difficult decisions without hesitating. Day trading is for those who can spend the whole day on charts, it is just like a full-time job. Traders who have a part-time or full-time job and only do their analysis on weekends and keep a check on during the weekdays can easily do swing trading as it is less time-consuming.

Traders who have a full-time job and are planning to invest in the long-term should try position trading. Anyone who cannot focus on trading for 4-5 hours straight should not try scalping at all. Day trading requires a lot of time, not only for placing trades but also for monitoring them. Anyone who cannot give continuous-time to chart and cannot focus on trading throughout the day shout avoids it If you are impatient and if you want multiple setups or quick profits, swing trading is not the right choice for you.

if you don’t have enough knowledge about fundamentals and how it affects the currencies You should avoid position trading. When I first started trading I had long-term goals, and patience was one of the best traits in me. I could wait for trades to reach their full potential without being frustrated or influenced by my emotions. But the trading strategy which I bought was about scalping, which is more aggressive, has a lot of stress involved, and needs fast decision making which was just opposite of traits which I had in me.

and so it didn’t work for me In the same way, every human being is different, you and I all have different mindsets, different needs, and different capabilities. Trading is stress and making decisions in that conditions are not strong traits of mine. I have long-term goals, but possibly you have short-term goals. So, therefore you need to choose a trading style which suits you the best There are a few questions which you should ask yourself before you choose a trading style.

1 Am I short-term- or long-term-orientated?

If you are Short term oriented then go for – Scalping or day trading If you are Long term oriented then go for – Swing trading or position trading

2 How much time do I have during the day to trade?

If you spend the Whole day – Day trading If you can only give 5-6 hours- Scalping and if you Can only check up on trades for few minutes several times a day- Swing trading or position trading. which you need to ask yourself is How fast is my decision making and how well can I handle stress?

If you can handle stress effectively and can make quick decisions then go for scalping or day trading If you cannot handle stress or make fast decisions then go for swing or position trading.

3 Do I work full-time?

Yes- Go for swing trading or position trading Part-time – Go for scalping. Don’t work at all – Day trading. Lastly, ask yourself this, Am I patient, or( aggressive)

5 do I need to see results quickly?

am I patient enough to wait for results or do I need to see the results quickly, If you are Patient enough – Swing or position-based types of forex traders is right for you. And if you want quick results – Scalping or day trading is suitable for you. And only after you answer these questions with all your honesty choose a trading style which is most suitable for you.

types of forex trading strategies.

A plan designed to achieve a profitable return. Four main strategies: day, position, trend, and swing. Let’s start with the most well-known: day trading. The method of buying and selling assets within the same day. No position is held overnight, minimizing risks associated with overnight movements in the market.

The main objective? Quick benefits from small price movements. The disadvantages? Time-consuming and only suitable for full-time traders. To profit from small rises and dips you need to monitor the markets constantly and be prepared to make decisions fast if conditions turn. Position trading. This involves buying and holding an asset for several days or weeks – sometimes longer, in the hope, the price will increase.

Position traders tend to expect a higher profit per position than day traders. But they also take on greater risk – due to the length of time the assets are held for. Which means they tend to place fewer trades. Then there’s trend trading. As the name suggests, this strategy involves analyzing if a market is in an uptrend or a downtrend. You go long if the market is trending up, short, if trending down.

Trend traders remain long or short until they believe the trend has reversed, regardless of time frame, which means the strategy can be used for short, medium, or long-term trades. And finally – swing trading. This style of trading focuses on charts and technical analysis to look for short-term price momentum. Swing traders aren’t necessarily interested in the fundamental or intrinsic value of the asset.

Instead, they look for trends and patterns in the price. Positions are usually held from one to several days – longer than day trades, but generally shorter than position trading. And unlike trend trading, swing traders will often take a position against the overall trend. So, those are the four main types of trading strategy. To work out which is best for you, consider your own trading strategies.

Do you like to make quick decisions, place lots of trades, keep on top of the latest price movements? Or do you prefer doing all your research beforehand, making careful, informed choices, happy to wait weeks or even months before seeing the results? Perhaps you feel comfortable only trading with the overall market direction? Or maybe you’re eager to identify opportunities using charts and technical indicators. Whichever you choose, remember, assets can fall in value as well as rise. So it’s important to use risk management tools where appropriate.

4 types of forex traders

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