What is great about Forex Trading is the type of versatility it can offer to those who would want to get into them. As this is the largest type of market exchange around, this attracts different types of people that eventually fall into certain types of traders. This evolves as the trader evolves according to his or her techniques in trading. Sometimes it can also be due to the lifestyle that they live that heavily influences their type.
The following are the 4 types of traders you will encounter in Forex:-
Type 1: The Day traders
As obvious as it sounds, Forex Trading day traders are a type where trades are made on a day to day basis. Every end of the day, the person closes all the positions for trading that they have and will not have any trades running beyond the same day.
Day traders are very knowledgeable and skilled in terms of the Forex market and use different forms of techniques to make sure that they are making the right decisions as quickly and as efficiently as possible.
You can also see how a person is a day trader by looking into their focus on making sure there are quick turn over rates that enable them to target for profit. They also trade in terms of high volume and are quick to rely heavily on technical patterns unlike others who would get into data analysis more.
Success basically comes to them as they end the trading day without any open positions
Type 2: Position Traders
On the other hand, another type of trader is the Position traders. What are they, you ask? They are the type who holds a certain position for a very long period of time. The reverse of a day trader, these types would look into holding a position for as long as months and even years depending on their strategy.
These types of traders are in it for the long haul and are not really interested in short-term fluctuations in prices that are usually in the radar of a day trader. These types of traders would venture more into the monthly and weekly analysis.
Investors who are Position traders are more likely to make decisions by taking certain governments, interest rates and models in consideration. In terms of number of positions, they only hold quite a few in a year. And as the reverse of day traders, they would focus more on trading by looking into the basic foundation of analysis instead of patterns.
You might want to consider this type of trading if you can hold out and hold positions at a very long period of time.
Type 3: Swing Traders
Considered between day traders and position traders, swing traders enable themselves to make profit in terms of holding a position somewhere around several weeks or as quick as having it overnight.
Specifying based on its name, this type of trader will buy as the market begins to exemplify a form of swing upwards and will decide to sell when the swinging of the price stops.
What is challenging for Swing traders is timing. As one will pay close attention to the swinging upwards of the market and will also take a form of attention that may last a very long time. Swing traders are looking more into getting highs and lows in terms of extremes and just like in day trading, they would focus more on analysis of price movements.
This type of trading may result in better profits with lesser risk involved but may require a type of practice that exemplifies a type of command in terms of analysis in trends and patterns.
