The most notable difference between various trading styles is the frequency of trading. Traders that like action and often «want to do something» perform better when they open several positions per day. Those who don’t like the chaos of the daily trading and like to think a lot before doing something will enjoy the profit from a scarcer trading. There are 4 distinct types of the trader’s personalities by the trading frequency:
- Position trader — mostly fundamental analysis driven positions that are opened very rarely — only few per month, often just about 10-20 positions per year. This style doesn’t require constant market monitoring and is recommended for the busy people.
- Swing trader — trades more often than the position trader, holding his orders open for the days and weeks. Targets and stops are lower than those with the position trading, but there are many trades per year. This is not a day trading, but it’s neither a long-term trading.
- Day trader — one of the most popular types of traders. They trade every day, opening several positions and holding them for a few hours to a day. This style requires a lot of market monitoring and will probably fit only full-time Forex traders.
- Scalper — this is the most risky and dangerous trading style. Scalping involves holding a position open just for a few seconds or minutes to gain the small profit from each position. There are dozens of trades each day with the scalping. Almost all brokers prohibit scalping. Another problem with scalping is that the major part of the scalper’s profit is eaten by the broker’s spread.
