There are Four Major types of Forex Traders;
- Day Traders
- Swing Traders
- Position Traders
- Major Pairs such as the EUR/USD, GBP/USD, USD/CHF, and USD/JPY offer the tightest spreads because they tend to have the highest trading volume
- If you like fast trading, lots of excitement, and do not want to hold a trade all day, scalping might be best for you.
Day traders usually pick a side at the beginning of the day, acting on their bias, and then finishing the day with either a profit or a loss. These kinds of traders do not hold their trades overnight. Most stock market traders fall into this category seeing how the stock market closes at 5pm, Monday through Friday.
- If you like analyzing the markets at the beginning of the day, monitoring your trade but don’t want to leave your position open overnight, day trading might be for you.
Swing traders are for those people that like to hold on to trades for several days at a time. These types of traders can’t monitor their charts throughout the day so they dedicate a couple hours analyzing the market every night to make sound trading decisions. The Forex Market is open 24 hours a day, 6 days a week.
- If you have a day job and can only dedicate a couple of hours every day to analyzing the markets, Swing trading might be best suited for you.
- Swing trading is great for those who have full-time jobs or school, but still have enough free time to stay up-to-date with what is going on in the global economies.
- You might NOT want to be a forex swing trader if you get sweaty and anxious when trades go against you.
- Very Important, if you do not have the balance to hold you through the volatility of the market, you may want to wait to enter a swing trade. Click here to learn about how to leverage your account to minimize risk.
Position traders are those that have trades that last for several weeks, months, or even years. These traders know that fundamental themes will be the predominant factor as well as technical analysis when analyzing the markets and therefore make their trading decisions based on them.
- You might NOT be a forex position trader if you aren’t patient. Even if you are somewhat patient, this still might not be the trading style for you. You have to be the ultimate zen master when it comes to being this kind of patient!
- Position Traders have a sizable account to work with to handle the fluctuations of the markets.
Not sure what type of trader you would be? Click link below to find out.