When you bring up the word trader, in most people’s minds they have images of a well dressed people running around yelling about buying or selling a specific stock. Or they picture a guy sitting in a quiet, lonely room staring blankly at a million screens with weird lines on them.
Well, the beauty of this business it that can be both or it could just as well be neither. It can you, it could be a coworker. The barrier to entry is quite minor barring really only capital and a willingness to try.
Now, that is covered, we will help you determine what type of trading may suit your needs best based on your lifestyle.
This is one of the most important decisions in your journey to be a profitable and proficient forex trader.
Short Term Trader/Scalper
This is the guy you will see with a bunch of screens in his office as he is looking for his next setup. The action of the market is quick and unforgiving so he has to be ready to pull the trigger at any moment. He usually trades for hours on hand and will be in an out of positions within minutes.
You will be primarily using the 1 minute, 5 minute and 15 min charts to make your trading decisions.
This is high frequency, high intensity trading.
Medium Term Trader/Swing Trader
This style of trading is much less stressful but requires a bit more patience as the trades aren’t as quick hitting. The good thing about this style is it affords you the opportunity to be in the market while not having to spend all your time in front of a trading screen.
Meaning, as many do, you can still work a job or do this in your spare time. The trade frequency is much less frequent as you may only find tradeable setups only a few times a week (depending on your particular goals and strategy.)
You will be primarily using the 30 minute, 6o minute/1 hour and Daily charts to make your trading decisions.
Long Term Trader/Investor
Now, this is the style of “trading” that most people are familiar with. Although, it is still trading to an extent, it is more like investing. You may only place 1 or 2 trades per month with positions likely to need weeks in order to completely play out.
This style is perfect for those who don’t want to be actively in the markets everyday and prefer to keep their dwellings to a few times a month.
You will be primarily using the 60 minute, the Daily and the Weekly charts to make your trading decisions.
Ultimately, there is no “perfect” or one size fits all solution. It mainly comes down to your preference, tolerance, objective and time. You have to look within and to your own situation to determine what will work best for you and go from there.