Each trader is uniqueand hastheir own goal, mindset, and strategy. Some traders may like to earn profits quickly, while others rely ona long-term game. So, it’s highly dependent upon different personalities. There are extensive approaches available in forex trading to try to speculate on price fluctuations and make profits from them.
Let’s find out the top 2 types of forex traders and distinguish how they are different from each other.
Four types of forex traders
There are four main types of trading styles;
- The scalpers
- The day trader
- The swing trader
- The position trader
- The scalper
Scalping trading is one of the popular trading styles, consisting of a relatively short period from opening trade to closing it. These traders execute a trade only from a few seconds to minutes.
The basic aim of the traders is to gain a very small number of pips as many times as they can grab throughout the busiest hours of the day. One thing that makes scalping more attractive is that smallertrades happen comparatively more frequently. It indicates that there are many small movements from which scalpers can earn high profits.
After selecting a type, all you need is to open an account with the brokers in South Africa to earn the highest.
- Day trading
Day trading is the most renowned strategy where traders trade with financial instruments over a timeframe of a single day’s trading to make high profits from small currency fluctuations.
Day trading is also a short-term trading style, but compared to scalping, traders typically only execute one trade a day and close it when the day is over.
This style is the best fit for those who have enough time to analyze the market throughout the day and execute and monitor the day accordingly. It is a quick way to make the trade and highest profits.
- Swing trading
Swing trading is used by traders who plan to profit from price swings. It is comparatively a moderate-term forex trading style.
Traders tend to identify a possible trend and then hold the trade for some time, and it may be from two days minimum to several weeks. This type of trade requires your patience to hold your trade for several weeks at a time.
Itproves best for those who can speculate on the markets throughout the day but can dedicate some hours to analyzing the market every night.
- Position trading
Position trade is the longest trading style that holds your trade from months to several years. It ignores short-term currency movements to appoint long-term trends to make high profits.
This type of forex trading style requires a lot of patience and consistency, along with amajor grasp of fundamental analysis.
What type of trade are you?
Choose the one that best matches your personality. Copy trading in the forex market can be used with any of the four main types of trading styles, including scalping, day trading, swing trading, and position trading, to help inexperienced traders replicate the strategies of successful traders. This can be especially helpful for those who are just starting and want to learn more about the forex market.
If you are a beginner, select your trading style right now, as changing your trading style again and again can lead to some problems. But yes, if you are a scalper and realize that it’s too fast to handle, then be flexible enough to switch it up easily.