What Type Of Trader Are You?
Scalper, Day Trader, Swing Trader, and Position Trader/Straight-up investor. These are categories that most people can generally fit into. If not, they probably aren’t trading.
Trading, like any extreme sport, gives you room to finesse and express your character in your art. There are different ways to skin this cat alright. You can make money fast but little, you can make money slow but big and you can make money in between that. It might all depend on the kind of person you are.
That’s right, you like to take the crust off your pie. A LOT of little wins that see you with a green bottom line. Scalpers trade on lower timeframes meaning, they get to take advantage of a lot of smaller moves throughout the course of the day. The market is always moving up and down in Forex specifically and you get to choose which playground you want to play on.
You might be one
- If you feel the need to always be in the market (and have the time)
- If you take losses very personally and prefer to win even if it’s a little
- If you have great composure in busy and fast-paced environments
- If you have very little patience
You might feel yourself getting tense as you read those characteristics because so many times those traits have been dubbed as bad traits to have as a trader. Not entirely true! It’s bad if you’re trading a style that doesn’t suit those traits. It’s important to be very honest with yourself as a trader. Once you have accepted certain truths about yourself, your trading can work around that. But denial = Unprofitable trader.
Day Trading can be slotted in with scalping because it is different but the number of trades can be as little as once a day or none. Day traders usually close out their trades by the end of the day or week at the latest and don’t like overnight risk (leaving their trades open overnight).
Again, not THAT kind of swinger! A Swing trader is more right in the middle of a short-term trader and a long term trader. They patience but usually not enough capital to justify waiting for one trade to move for a year.
You might be one
- If you are patient
- If you have a full-time job and can only look at the market for a few hours a day
- If you don’t mind bigger stop losses
- If can’t keep calm in fast-paced environments but can keep a cool head if price moves against you a little
Swing Traders trade a longer-term compared to day traders. A trade can last from a couple of days to a couple of weeks and, very good ones, a couple of months.
This is the closest thing to being an investor for a CFD (Contract for Difference) trader. These traders are a rare species and possess qualities that you will not gain overnight. The patience needed to perform this kind of trading is not easy but can be made easier by having capital. It is hard to watch $100 turn into $170 over 6 months. But, if you add a couple of zeros, I’m sure you wouldn’t mind ;).
You might be one
- If you have enough capital that trading this way makes sense
- If you have goals that align with this sort of trading
- If you have no issues witnessing major moves against you
- If you don’t mind waiting months and years for results
- If you are willing to learn and master fundamentals
A position trader has to be in touch with the fundamentals of his/her trade. Your stop loss is so big that you may only prove to be wrong months later. Entire Trends may be formed against you but, if you understand your trade then you must have confidence in it. You must be swayed by public opinion (which is usually wrong anyway).
Trading allows you to express yourself and your goals if you’re only honest with yourself. Go find yourself in those charts and get unparalleled results once you have.
Don’t bet the farm.
Don’t lose your shirt.
Cut the L.
Keep the W.