The forex trading strategy you will adopt depends on the type of trader you are. Knowing which type of trader you are will help to get rid of your fear and have more faith. Here are the 5 types of forex traders in the market.
They can also be called guerrilla traders. They get inside the market many times a day. They open each position for a few seconds. They spend most of their time finding trend changes on the charts. They can make snap decisions for getting more profit when the trend changes. They are fast-paced and often use software to execute trades.
Day traders don’t like holding open positions overnight. They open a position at the beginning of a trading day and close it at the end of the day. They only care about opening and closing their positions, and not so much about profit or loss. They rely on trading news to make decisions. They can spot breakouts instantly.
This kind of traders keeps positions open for more than a day but not more than a week. This type of trading is appropriate for those who struggle to balance forex trading with their daytime jobs. They have larger profit targets. They don’t worry about forex spreads very much. They can trade currencies with higher spreads.
They are the opposite of scalpers. They can keep a position open for weeks and even longer. They can spot trades that lead to long term profits. They have large trading accounts that help them to withstand losses they make.
They don’t worry about time frames. They are beginners in this market. They know some specific technical indicators that they have tested before. They code their strategies in the forex trading software.
The personality of the trader plays an important role in determining the strategy of forex trading. Personality traits like impatience, risk-taker, etc. dictate which strategy would be best for you. The forex trading strategy that you choose should fit your lifestyle and personality.