Let’s say you are going to start trading in Forex. But you don’t understand what timeframe you should follow for your trades. Today’s article will help you to decide in that kind of situation. We will discuss the types of traders based on how much time the trades stay live. There are only four types of traders in Forex, which are The Scalper, The Day Trader, The Swing Trader and The Position Trader. In the following, these categories will be discussed thoroughly to help you understand which path to take when you are going to start trading in the first place.
The scalpers are really a short time-based trader. Basically, they keep their trades live for about one to five hours a day. If you search the internet, you will find that a scalper uses price charts of one to fifteen-minute time span. They look for only 15 to 20 pips per trade. This type of trading is really stressful for your head because you have to stay in front of your monitor almost all the time as you are trading every time throughout the day. Novice traders are the most common scalper because they are too scared for loss in the first place. That’s why they trade more frequently and keep their trades live for a short period of time.
The Day Trader
The Day traders are more patient with their trades because their trades stay life for a longer period of time. Most of the time day traders trade once in a day. These type of trades are based on price trends of the market. It could be an uptrend or it could be a downtrend. A day trader basically looks for 20 to 50 pips fluctuation from the market. And the time frame of their price chart would be of fifteen minutes to one hour. This the second most common type of traders and this type of traders also have to keep themselves busy for good profit. Maybe less than the scalper but, a day trader also have the stress of his or her trades. If you can control yourself from breaking out while you are day trading you can go for this route.
As a new investor, you need to understand the risk of day trading. Even the experienced Aussie traders find it hard to make a consistent profit by day trading the market. Though CFD trading in Australia is extremely popular most of the traders are following the conservative method. They know how volatile this market can be in extreme conditions. They never take the unnecessary risk even though they have a huge amount of money in their trading account. You have to take this profession as your business and trade with logic.
The Swing Traders
This the most common type in Forex trading because traders have to deal with less headache of their trades. As swing trading is based on the price swing of the market, traders have to keep their trades live for a longer period of time. A Swing trader trades for once a week mainly, sometimes twice but not more than that. Their charts have one hour to four-hour time span according to their preference. The target of a Swing trader is 100 to 1000 pips per trade.
The Position Trader
This is the category of the big fish in trading like the master traders and legends of Forex. A master trader like ‘George Soros’ keeps their trades live for about six months to one year because their investment is in the class of millions of dollars. They trade based on political and economic analysis and their price charts is has one week to a month of the time period. Their target is also high, as they look for 100+ pips difference in every trade.