The best traders in the business have things that separate themselves from the rest of the group, but what are the traits that they bring to the table? You need to be intelligent and willing to work when it comes to being a “big dog” in the forex trading world, but what are the other intricate attributes that need to be a part of your personality? There are an abundance of different ways to categorize a trader, but in the end there’s only the successful ones, as well as the not-so-successful ones. Timing is a crucial trait to look at as well, but not many traders are able to perfect their skill sin that regard.
In the end there’s going to be a different sort of type for every trader out there, but there are specific trades that can be put into categories that all forex gurus are aware of. Where you stand on this matter isn’t that important, but it’s always a nice touch to know where your peers might have you rated.
The Common Trader (Day Trader)
When it comes down to it most traders are making a living through the forex on a daily basis, but they don’t find themselves working those late nights. They trade all day, and as a result never have any holdings that are active after the session has been closed. Trading within high-volumes would be the norm for the day trader, and that’s simply because they aren’t trying to keep anything for themselves by the end of the day (well, anything besides profits). The turnover rate that this particular trader would be searching for is quick, and they’re all about the short-term trading goals. This goes for many (or in some cases just one) trades, and they are known to trade in quantities that are ten times larger than a normal one would be.
They do this because they want to get with the small swing (which turns in a greater profit), so traders who are using this process will have smaller charts when it comes to time-frames (five or fifteen minute period charts would be nothing new to them). Patterns appeal to these traders a lot more often as well, because they’re just trying to turn a quick buck (most trends and patterns lead a trader straight to the money).
The Swinger (Swing Traders)
These are the traders that aren’t afraid of a longer time-frame, and in some instances a swing trader can keep his holdings for a few hours at a time (and in special cases they could keep them for up to a few days, sometimes longer!). This will effectively call turns when it comes to the market, and as a result the swing trader uses the change to their advantage (but there’s a possibility that they’ll make it worse). Timing of the essence when it comes to how swing traders operate, and when compared to a day trader they could be considered the more patience of the two.
Technical analysis is key for swing traders, and even day traders prefer this particular process over the alternative (that being fundamental analysis). To put it into simpler words, a swing trader takes many risks when it comes to the market, as they could trade for stock that has bottomed out, only to swing the momentum and come out on top in the end.
Positional Trading (Positional Traders)
These are the traders that don’t mind waiting months to turn a profit, and they’re also the most patient out of the three trader types we’re going through. Position is important when it comes to the forex market, and these traders use it to their advantage. They understand that a long-term plan is ideal in order to be successful in this industry, and they’re also the traders that stick to their fundamentals. They aren’t looking to be the young stud who has been turning profits left and right on a daily basis, instead they look at all of the variables that could affect their trades. The things that we overlook (like governmental issues and economic standings in other regions) could still play a part in the forex trading market, and positional traders know exactly how to observe and react to these situations.