New traders are often confused which trading style to pursue. If you too have the same dilemma, this article is for you. It is imperative to pick a trading style that best suits your personality before you start navigating the market. Without a technique, you will get confused and may end up with huge losses. Your adopted style must depend on your financial goal, risk tolerance, time that you can invest daily to follow the market, and several other similar factors. So, you must learn about the different trading techniques to make an informed choice. In this article, we will discuss four trading styles. So, keep reading.
1. Scalping Traders
Scalping is a trading style that is employed to earn from small price changes to make profits that add up.
Scalpers trade frequently and in small successions.
A scalp trader needs to have a strict exit policy because one large loss could eliminate all the small profits he has made in the other deals.
Scalp trading, therefore, needs discipline, decisiveness, and stamina. With these qualities and the right tools, you can become a successful scalp trader.
2 Day Traders
Day traders, as their name implies, work on a day-by-day basis.
At the end of every day, a day trader will close out all of his or her trade positions, opting not to leave anything running overnight.
Day traders are known for high volume trading and focusing on technical patterns rather than relying on data analysis.
Success, for a day trader, means ending the day with no open positions and a profit relative to the beginning of the session.
3. Position Traders
Position traders hold his or her position over longer time periods: weeks, months, or even years.
They are less interested in the short term price fluctuations, instead they pay attention to weekly or monthly price action analysis.
They adhere more strictly to fundamental models, closely watching for announcements such as earnings reports, interest rate, CPI, etc.
They tend to hold fewer trade positions, sometimes only a handful a year.
4. Swing Traders
Somewhere in between day and position traders are swing traders, who make a profit by holding a position anywhere from overnight to several weeks.
As their name implies, these traders buy when the market begins to show a swing upwards and sell when this price swing stops.
Swing traders have a blended approach to fundamentals analysis and patterns; they’ll look at macroeconomic as well as day-to-day trends
Traders of this kind are known to place positions in liquid currency pairs like the pound and the dollar.
If you enjoyed reading this article please show your support with likes.
Comment below what trading style is best for you.
1. Scalping Traders
Scalping is a trading style that is employed to earn from small price changes to make profits that add up.
Scalpers trade frequently and in small successions.
A scalp trader needs to have a strict exit policy because one large loss could eliminate all the small profits he has made in the other deals.
Scalp trading, therefore, needs discipline, decisiveness, and stamina. With these qualities and the right tools, you can become a successful scalp trader.
2 Day Traders
Day traders, as their name implies, work on a day-by-day basis.
At the end of every day, a day trader will close out all of his or her trade positions, opting not to leave anything running overnight.
Day traders are known for high volume trading and focusing on technical patterns rather than relying on data analysis.
Success, for a day trader, means ending the day with no open positions and a profit relative to the beginning of the session.
3. Position Traders
Position traders hold his or her position over longer time periods: weeks, months, or even years.
They are less interested in the short term price fluctuations, instead they pay attention to weekly or monthly price action analysis.
They adhere more strictly to fundamental models, closely watching for announcements such as earnings reports, interest rate, CPI, etc.
They tend to hold fewer trade positions, sometimes only a handful a year.
4. Swing Traders
Somewhere in between day and position traders are swing traders, who make a profit by holding a position anywhere from overnight to several weeks.
As their name implies, these traders buy when the market begins to show a swing upwards and sell when this price swing stops.
Swing traders have a blended approach to fundamentals analysis and patterns; they’ll look at macroeconomic as well as day-to-day trends
Traders of this kind are known to place positions in liquid currency pairs like the pound and the dollar.
If you enjoyed reading this article please show your support with likes.
Comment below what trading style is best for you.
