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Posted on Jul 26, 2021 at 04:04 PM
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How to Determine Your Trading Personailty and Succeed at it!

Forex traders tend to fit into one of the following six core trading types: scalper, day trader, swing trader, position trader, algorithmic trader, and event-driven trader. In this article, we would define the different personalities so you can identify yours and see the traits that are needed to succeed as one.

Indeed, if 10 blind men were asked to describe an elephant by touch, they would each give different descriptions of the gigantic mammal… Like elephant, like the Forex Market 10 traders will see the market from different perspectives because of their personalities.

We’ve discovered that Forex traders tend to fit into one of the following six core trading types: scalper, day trader, swing trader, position trader, algorithmic trader, and event-driven trader.

As a forex trader, you want to know your trade personality and build up yourself to succeed as that type of trader.

This piece will define the different trading personalities so that you can find where you fit in and pick out the traits you need to succeed at it!

What type of forex trader are you? Well, let's find out!

 1. The Scalper:

A Scalper is a short-term trader who focuses on holding positions for timeframes as small as a few seconds to a few minutes.

Forex scalping strategies involve trading frequently throughout the day, with the intention of achieving small gains at the busiest (most liquid) times so they are continuously faced with processing new information and reacting to rapid market changes. 

Basically, Scalpers live life on the fast lane and they want their profit quick!

As a scalper, you’ll ideally be observant, instinctive and quick-witted – but unrelenting under pressure. A scalper's delight is the M1, M5 or maybe the M15 time-frames.

2. The Day Trader:

A Day-trader also executes frequent trades on an intraday timeframe, however, their routine will not be as fast-paced as a scalper.

Day traders will similarly close all positions before the end of the trading day, so as not to hold any overnight or carry any trade to the next day. This means their trades are not affected by negative news that can hit prices before the market opens or after it closes.

Day Traders typically trade the M15, M30 & H1 time-frames.

3. The Swing Trader:

A Swing trader holds onto trades for longer than a single day, and up to perhaps a couple of weeks.

Over this short timeframe, swing traders will typically favour technical analysis over fundamentals, while still staying abreast of the news events that can trigger volatility.

This trader type is less frantic than scalpers and day traders, so extreme alertness is less of a requirement, but you’ll still require a strong eye for details when it comes to chart analysis. 

Due to their patient nature, swing traders find the H1, H4 & D1 time-frames to be comfortable for their trades.

4. The Position Trader

A Position trader hold trades for longer periods of time, from several weeks to years.

As the longest holding period among trading styles, position traders are less interested in an assets short-term price fluctuations and more concerned, naturally, with the performance over more sustained timeframes.

As a forex position trader, you will require patience as your money will often be locked up for long time periods.

With longer-term trades, a thorough knowledge of fundamental factors is beneficial, so advanced analytical skills will serve you.

Because major Investment Banks, Asset & Fund managers fall into this category, they prefer using the D1, W1 & MN due to the volumes of their positions.

 5. The Algorithmic Trader:

Algorithmic traders rely on computer programs to place trades for them at the best possible prices.

Traders can use defined instructions, or high-frequency trading algorithms, to either code the programs themselves, or purchase existing products.

This type of trading suits people who are comfortable with using technology and want to apply it in their forex career.

Given the nature of the programs, algorithmic traders will also have a keen eye for the technical charts. Expert traders or Robots are mostly used to achieve this.

 6. The Event-Driven Trader:

Event-driven traders look to fundamental analysis over technical charts to inform their decisions.

They’ll seek to benefit from spikes caused by political or economic events, such as Non-Farm Payroll (NFP), FOMC data, GDP, employment figures, and elections.

This type of trading will suit a person who likes to keep up with world news, and who will understand how events can impact markets.

Inquisitive, curious and forward-thinking, you will be skilled at processing new information and predicting how global and localized events may play out.

A major news outlet with a well-designed yearly calendar can be found a forexfactory.com/calendar.

Want to learn more about this in practical 1-on-1 Live Forex Trading Sessions? Click to book your spot in the next “Trade-With-Me” & join us in our live Trading Room for expert Analysis & higher win-rates.


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