There are four main types of forex traders that can be distinguished based on factors such as trading timeframe and trading methods.
Before you start trading, you should understand the differences between these groups and decide which trading style you wish to adopt. The four main types of trader are: day traders, scalpers, swing traders, and position traders.
Below you will find a brief description of each group.
Day Traders
Day traders are one of the most popular types of forex trader; they hold their trades for a few hours and usually close all positions before the session ends. This is a short-term trading style that involves analysing charts with timeframes of 15 minutes, 30 minutes and 1 hour. These traders usually spend 3-5 hours a day trading and aim for a quick turnover. They tend to rely more on technical analysis and volatile pairs to generate their profits.
Scalpers
Scalpers hold trades for only a few seconds to a few minutes, aiming to capture very small numbers of pips as many times as possible during the busiest periods of the day. They make a small profit from each rapid trade and prefer to examine charts with 1-minute to 15-minute timeframes.
- Trade Forex
- Trade Crypto
- Trade Stocks
- Regulation: NFA
- Leverage: Day Margin
- Min Deposit: $100
Swing Traders
They hold positions from several hours to several days and analyse charts with 1-hour to 4-hour timeframes. A swing trader makes an average of 3 to 6 trades per week and aims to secure a large number of pips, typically between 100 and 300. Most of these traders are not professionals, and forex trading is not their main source of income.
Position Traders
This is the longest-term trading approach of the four groups. These traders may keep positions open for several weeks to several months. The main goal is to capture a large number of pips per trade, typically between 300 and 1,000 pips. These traders rely mainly on fundamental analysis based on economic models and government decisions.