Types of Traders & their Differences

There are 3 types of traders:

1. Day trader if Trades for the These are market participants that will usually avoid holding a trade after the session closes and will trade in a high volume fashion. Day traders usually use shorter time frame charts, using one, five, or 15 minute periods. In addition, day traders tend to rely more on technical trading patterns and volatile pairs to make their profits.

2. Swing trader Taking advantage of a longer time frame, the swing trader will sometimes hold positions for a couple of hours maybe even days or longer. Unlike a day trader, the swing trader is looking to profit from an entry into the market, hoping the change in direction will help his or her position. In this respect, timing is more important in a swing trader’s strategy compared to a day trader. However, both traders share the same preference for technical over fundamental analysis.

3. Scalper if A trader that attempts to make many profits on small price changes.

Traders who implement this strategy will place anywhere from 10 to a couple hundred trades in a single day In the belief that small moves in stock price are easier to catch than large ones. The main goal is to buy (or sell) a number of shares at the bid (or ask) price and then quickly sell them a few pounds higher (or lower) for a profit. Many small profits can easily compound into large gains if a strict exit strategy is used to prevent large losses.