There are a lot of names and designations that we can categorize Forex traders into. However, when taking into consideration, time, traders and strategies tend to fall into three broader and more common categories: Day trader, Swing trader, and Position trader.
1. The day trader
A day trader will, for lack of a better definition, trade for the day. These are market participants who usually avoid holding anything after the closing session and traded in high volume fashion.On a typical day, this short-term trader usually aims at a large volume of trades with small profit target. This is in order to capture more benefits of a rather small oscillation. As a result, a trader who falls into this category tends to use the smaller time frame, with one, five, or 15-minute periods their best option. In addition, day traders tend to rely more on technical trading patterns and volatile pairs to get their benefits. Although a fundamental long-term bias can be useful, these professionals are seeking opportunities in the short term.
2. Swing Trader
The swing readers take advantage of a longer time frame, the swing trader sometimes holds positions for a couple of hours - maybe even days or more - in order to catch a turn in the market. Unlike day traders, swing traders are looking to take advantage of market entry, hoping the change in direction will help their position. In this sense, time is more important in the strategy of a swing trader compared to a day trader. However, both operators share the same preference for technical over fundamental analysis.
3. The Position Trader
Usually, the position trader holds a position for a much longer time when compared to the day or swing traders, the dealer position differs mainly in its view of the market. Instead of watching market movements in the short term, as the day and swing style, these traders tend to look at a long-term plan. Position strategies span from days, weeks, months or even years. As a result, traders will look at the technical training, but more than likely adhere strictly to the fundamental longer-term models and opportunities. These FX portfolio managers will analyze and consider economic models, governmental decisions, and interest rates to make trading decisions. I hope this post can recognize the category of forex trader you fall into.
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