Forex Trader Classifications
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Forex traders can be described as being in one of two groups. Lets call one Successful Traders and the other, "Anything But Successful". They can be considered in categories of professional traders as compared to inexperienced traders, Perhaps one could group them as emotional traders or unemotional traders. Let us consider "types of traders" while examining the topic a bit differently than most others might do. I contend that traders are unique and while have common characteristics, differences make classification rather a silly endeavor.
The conventional world categorizes traders by their method of analysis and execution. You can read hundreds of articles and they all say essentially the same thing. Hundreds of articles may contain essentially the same information, so first defining traders conventionally, allows for a more thorough understanding of my spin of the subject of "types of traders."
Types of Traders:
1. Scalpers:
a. A Scalpers main objective is to extract small quantities of pips (25 to 50) as many times as possible throughout the busiest times during the day. These men and women must be in front of a computer screen much of the time. They enjoy the excitement of rapid candle reactions. There are many retail traders than consider scalping to be for a target 10 to 20 pips.
2. Day traders
a. Day traders act on their belief of a daily bias to the market derived from pivots, Fibonacci lines or other indicators that retail speculators use to give them peace about a decision. They execute an entry and then close their trade during a single session, finishing the day with either a profit or a loss. These kinds of traders do not hold their trades overnight, as they have often been taught never to do so.
3. Swing traders
a. Swing traders hold onto trades for several days at a time. These traders refuse to be held captive to a screen, and will monitor their charts for mere moments throughout the day. They dedicate their time "in the market" to hours outside the market, performing an analysis every day prior to their trading session decisions. Successful traders populate this area in large numbers.
4. Position traders
a. Position traders make trades that last for weeks, months, or even years. These traders execute based on trends and manage their trades by adding more positions as the trade blossoms. These men and women analyze the markets and charts based on high-time frame charts. This creates entries based on many factors that for the purpose of this article will be defined as: numerous, varied, and complex.
Choosing your trader type:
I suggest that your personality and lifestyle guide your your decision about the type of trader you will become. Be honest with yourself about your strengths, weaknesses, and available time. Then remember that you are never just one type of trader or the other forever. As your life changes, your trading style and trading type may change as well.
Be mindful as you consider who you are and what your obligations to your family and friends may be. You might start by asking yourself these questions and then sending your answers to me. I will evaluate your responses and help you determine which one of the four categories best suits you today. I can also give you a personal tour of some sites that can be helpful in your self evaluation, should you decide to type yourself.
Here is my advice you only want to be a successful trader. The time frame is irrelevant to your success except that it fits you. A successful trader is made not borne. Success takes work. Do not be fooled by those promises of quick riches.
Questions to consider:
· Am I disciplined? If your answer is no, Stop and get another dream!
· Am I patient? If your answer is no, Stop and get another dream!
· Am I analytical? If your answer is no, Stop and get another dream!
· Am I a warrior?
· Am I willing to sit in front of a computer screen for six to eight hours per day?
· Do I trust my own judgment enough to determine a trade and walk away?
· Do I enjoy learning new things?
· Am I able to make quick decisions?
· Do I have a good memory?
Now, please review the information above. To be a successful trader takes more effort than deciding what type of trader you will be. Take the time to determine what it will take for you to become the only type of trader you should even consider becoming, a successful one. Then go to school and acquire the skills necessary.