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Scalp

3 Types of Traders: Which Are You?3 Types of Traders: Which Are you? There are many different approaches of trading the financial markets that has provoked countless methods and strategies to be created over the decades. One popular way to simplify & view this is to break it down into 3 types of traders which is categorised by two main factors which include the trading frequency & timeframes used by each one of the trading types. 1️⃣ Scalper The large majority of beginner traders end up starting out with this type of trading because of numerous reasons. But mainly, this is due to the fast pace that the market moves, presenting many trading opportunities and giving off the perception of an opportunity to get rich quick. Ironically, this trading style is then considered as one of the most easiest and successful ways of trading by beginner traders, while being stated by professional traders to be one of the most difficult. Scalpers often have dozens of trading positions open at a time during multiple trading sessions and need to be in front of the charts at all times. Therefore, paying huge commissions to their broker due to spreads also making this type of trading have a high cost to it. Not to mention the chaos in lower timeframe analysis that eventually results in the majority to stop trading. This is not to say that you cannot be successful with scalping. However, the main obstacle alongside many other with scalping, is the level of constant focus & rapid-decision making required which can have massive negative effects on your overall trading psychology if not kept in check. 2️⃣ Intraday Intraday or day trading is the most popular type of trading amongst retail traders and is what I prefer the most myself. Staying relatively active, the market gives some time for the trader to reflect & think upon their analysis on the pairs they are analysing. Opening and managing on average ~1-2 positions per trading session, the intraday approach offers a degree of freedom. But does come at a cost due to the declining amount of volume and volatility, intraday traders may experience low risk:reward setups because of the average daily range of many pairs on the market. 3️⃣ Swing Swing trading is the best choice for individuals who want to pursue trading while having a full-time occupation outside of trading. This is possible due to this type of trading primarily focusing on the higher timeframes such as daily/weekly for a large proportion of their analysis. Thus, swing trading is not demanding when being combined with an individuals typical daily routine and trading psychology since they aim to catch mid/long-term market movements. With an average trade holding length of 2 weeks and only 1-2 positions being placed per week. Swing trading is regarded to be one of the least emotional approaches and involves low cost of trading with great risk:reward setups. Though, the main problem with swing trading is the degree of patience required when holding out for long period of times. Often resulting in the trader closing their positions too early and not having the ability to allow the positions to reach their final targets. Which type of trading do you prefer?
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by NimmoCapital
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