What type of trader you are? The forex market is a global financial market where lots of traders have opportunities to expose their talents at the global level where different types of trading are implemented by different types of traders. In this article I am focusing more to make clear a distinction among various traders so that readers aren’t confused. The trader – “Forex trader” is a person who trade over different currencies, financial instruments or commodities for the intent of making profits during forex trading. Day Trader –This type of trader, also known as Intraday trader, are traders who buys and sells trades within a day. In this way, the liquidity of the market increases as he/she open and closes positions on the same day. They may be retail traders who work for themselves or may be institutional traders who work from another institution. Day trader makes fast profits per unit time interval and there are more possibilities of trading as day trading increases market liquidity. These traders work on fewer risks. Intraday trading is not for beginners especially at low TFs. Day trading looks like battlefields on the forex market. Position Trader – These are traders who keep their trading position for a long time from months to years. They follow “buy” and “hold” hedging or arbitrage. A benefit of position trading is that it has lesser risk or you may reduce the risk of losses by hedging. These traders work on future contracts and needs a solid financial education. Since this contract starts from a period of 3 months, it will take commissions. This forex trading has less opened position and gives less interest for institutional traders. Hedgers and speculators come in this type of trader’s category. Hedgers simply fix the future price, at which they are going to sell or buy the trades, and wait for that time in the future in which they either see an appreciation or depreciation in the market prices. This hedging not only brings a profit during forex trading, but at times even but tries to make a great reduction in the losses during forex trading. Swing Trader – Swing trader is a person who keeps positions opened for longer than two weeks but less than the period of position trading. If positions cross over for more than two weeks, it may not prove profitable and because of the swap points, long positions are exceptional cases. This type of forex trader takes advantage of price swings in the trends of strong stock market. These traders do not look interested in fundamentals of stock values, but focus more in their price patterns and trends. This forex trading strategy varies a little from trend based forex trading strategy. Here the powerful move would be usually shorter than the trend strategy and this shorter period tends from a few days to weeks. Traders usually wait for the specific move or news event, which can stimulate the intended pairs of trading to move forward for a few days at least. In this way we can say that swing trading, where 15-20 percent, traders are at profit, is the best choice for beginners who are learning the basics of forex trading.
Happy Forex trading!