There are four main types of forex traders that we may determine depending on features such as trading time frame, trading methods etc.
Before start trading you should understand the difference between the different groups and decide which type of trading style you want to implement. The four main types of traders are: day traders, scalpers, swing traders, positions traders.
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Below you can find a short description of each group.
Day traders” are one of the most popular type of forex traders who hold on their forex trades for a few hours and usually never hold trades after the session close. This is a short term trading style, that implements analysis of charts with time frame 15 minutes, 30 minutes and 1 hour. Those traders usually spend 3-5 hours a day in trading and aim for a quick turnover rate. They tend to rely more on technical analysis and volatile pairs in order to gain their profits.
The “Scalpers” hold on trades for a few seconds to a few minutes aiming to capture very small amounts of pips as many times as they can during the busiest times of the day. They make small profit from each rapid trade and prefer to examine charts of 1 minute to 15 minutes time frames.
They hold positions from several hours to several days and analyze charts of 1 hour to 4 hours time frame. A swing trader makes an average of 3 to 6 trades in a week and aims to make large number of pips in profit, 100 to 300 pips. Most of these traders are not professionals and the forex trading is not a main income source.
This is the longest time frame trading compared to the other three groups. These traders may have trades that last for several weeks to several months. The main goal is to make large number of pips per trade, 300 to 1000 pips. These traders use mostly fundamental analysis based on economic models and governmental decisions.