4 types of traders in Forex trading

4 types of traders in Forex trading - Personalities of people should be different from each other. It is the same with a trader when trading. In the world of forex trading, there are several types of traders with different trading styles.

In general, there are four types of traders in the forex trading world, namely speculators, day traders, position traders and swing traders. This type of trader is characterized by a risk profile, trading frequency and target location when entering the market. Well, since the frequency of trading and target positions are not the same, they usually use different time frames, risk management and trading systems.

This difference usually arises from differences in nature and conditions of employment, as trading can be an educated person who tends to have more time working full time rather than a student. He cannot keep a close eye on the price, maybe he is self-employed, etc. For this reason, trading has different strategies.

4 types of traders in Forex trading

4 types of traders in Forex trading

The more often a trader makes trades, the more chances he has to take risks and the higher his trading skills. The trading style of each type of trader pursues the same goal - to make a stable profit in the simplest and most convenient way for traders. Take a look at the following four types of traders, and which one is right for you?

1. Scalper-trader

Scalper trader is a term for traders who use speculative methods. Speculators trade more often than other trades because the trade holds positions for a very short period, that is, from seconds to minutes. Short trades with high frequency and low profit targets. Within an hour, a trader can often open and close positions.

This strategy can be applied if there is a lot of flexible timing in the trade, although the risks are generally higher because the odds of the line saw also increase. What is a leather saw?. Plus, transaction fees are much more wasteful.

Typically, the profit target in this strategy is 1-10 pips per transaction. This type of trader is usually based on a 1 to 5 minute chart. Speculative strategies are best implemented when the US and European markets are open, that is, when prices fluctuate. Here are some of the things scalpers should look for.

Distribution size

Choose a currency pair with a tight spread. Avoid pairs with large spreads because the risks outweigh the rewards. Examples of currency pairs with small spreads: EUR / USD, USD / JPY and GBP / USD. Moreover, this currency is highly liquid.

Raising the level of funding

Since scalping strategies have a high trading speed with a small target profit in a short time, the leverage used is also high, so they can generate large profit on an interest rate.

2. Day of the trader

A day trader is a trader who trades for one day. Trading operations are completed before the trade is closed with both a loss and a profit. The time required for a single transaction ranges from minutes to hours. Traders feel comfortable closing a position without holding it in order to avoid news shocks that could disrupt prices.

Usually a trader's daily profit target is 20-40 pips, depending on the purchased currency pair. The choice of a currency pair to trade is the same as the choice of speculators, a currency pair must be volatile in a short period of time.

15-minute and 30-minute charts are used to track price movements. Unlike speculators who avoid news, day traders see economic news that can move the market further.

3. Swing Dealer

Swing traders are traders who start trading in a few days, but in less than a week. Traders who work full time or have limited trading hours are suitable swing trading techniques.

In a volatile currency pair, a swing trader can set a profit target of 50-150 pips or more. The chart is used as a benchmark for 1-hour and 4-hour transactions.

From a strategic point of view, swing traders tend to be more conservative than speculators and day traders. Swing traders check some parameters for confirmation before moving forward. Thus, they are not affected by price movements in the intraday range.

They are more focused on medium-term trends. Since the profit targets are larger, swing traders are not affected by currency fluctuations and wide spreads.

Less risk

Swing traders are less likely to trade compared to speculators and day traders. Opportunity also avoids common pitfalls and avoids intraday price movements that typically outperform day traders.

To save time

This type of trader's strategy can be applied to traders who are busy and have so little time to trade that traders do not need to constantly monitor price movements.

Opening a table lid can certainly disrupt work focus and become ineffective. This feature allows swing traders to trade while remaining productive in their field. In addition, viewing too many charts can "tempt" a trade to make losing trades.

Swing traders are usually carried out by people with no formal basis for economic trading. And for a limited time, he did not have time to follow economic news and conduct fundamental and other analyzes. Therefore, swing traders rely on technical analysis and use it as a guide to trading.

Technical analysis is considered to be effective in reflecting various current market conditions using statistical criteria.

4. Merchant Center

A position trader is a type of trader who trades by holding positions for a period ranging from several weeks to several months. In terms of time, the position of the trader is the longest compared to other types of traders. Their trading style is the opposite of speculators who want to move quickly.

If swing traders are guided by technical analysis, they will be guided by fundamental analysis with standard economic data. Even if you use a little technical analysis, position trading uses daily, weekly, and even monthly time frames.

The target profit for each trade can be up to 500 pips. Some of the advantages of this strategy are that it saves time so that you can focus on your activities without constantly monitoring prices, because of course you rarely trade. Only transaction costs are minimal and you may even have a chance to make a profit. Color exchange.

A swap is the interest paid on a loan provided by a trade against the currency pair it holds.

Do you still have trouble understanding the basic forex trading techniques?

Don't worry if you find it difficult to understand the tutorials or basic trading techniques, this is not because of your inability to understand the forex market. To simplify the process of becoming an expert trader, join the Telegram GIC forex Academy trader community who will provide trading information and training that is often stored in the GIC.

You can also join the GICtrade Telegram trading community to ask other traders about their trading experience. You can also subscribe to the Instagram GIC for information on the webinar and many other cool bonuses. Plus, on YouTube GIC, traders can also learn to trade for free!

So what are you waiting for? More complete features that fully support you to start investing and trading Forex through the GIC. Make transactions easier, safer and more profitable. Start by creating a demo account.

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