Wednesday, 5 November 2014

There Are All Types

Today I did something I haven't done in a long time...  I scalped the EURUSD, 11 trades in about 2 hours...  I used the minute chart and went in the direction of the major trend.  EURUSD has been a short for a while.

It's been a few years since I scalped.   I remember when I first started trading it brought me great joy.  There is an argument to say that's the kind of person I am.  Get in, get out. Rest easy.   That's how I like to exercise, that's how I like to shop, and that's how I like to date. hehe

There are all types of Traders...
So the question is, what kind of Trader are you?

  • Typically in and out within minutes or even seconds.
  • Never leaves a position open overnight.
  • Goes for as little as a pip.  Typically not more than 10 pips.
  • Trades the minute and 5 minute chart.
  • Given the small Take Profit, currency pairs with the best spreads are favored. 
  • News times are typically avoided.

Day Trader
  • Stays in the trade only for the day.  Closes (even at a loss) at the end of the day.
  • Trades the 15 minute, 30 minute, and 1 hour chart.
  • Take Profit is between 10 and 50 pips.
  • Some Day Traders love trading the news, the majority will wait till after the news release and volatility has settled.
Swing Traders
  • Hold Trades beyond a day but never beyond a week.
  • Trades the 1 hour and 4 hour charts.
  • Take Profit is between 50 and 200 pips.
  • Wait for several confirmation signals.  Requires a lot of patience!
  • Extremely technical traders.
  • News is considered noise.
Position Traders
  • Trades can last weeks, months or even a year.
  • Trades the monthly, weekly, and daily charts.
  • Well versed in the financial market and it's long term direction.
  • Not concerned with short or mid term market conditions.
  • Requires some serious balls in my opinion.   Emotions can run wild and patience is a virtue.
Robot Traders
  • Technical Traders that have programmed their software platform to trade automatically for them.
  • Backtest their trading plan and adjusts their code on a regular interval (monthly at a minimum).
  • Hands-free trading while the computer trades for them.
  • Somewhat dangerous as the Robot is only as good as it has been programmed to behave.
  • Often successful for a short period of time before suffering major drawbacks.
  • Many accounts have been wiped out for these "Holy Grails".

What kind of trader are you?  Well that might not be an easy answer.  If you have done any type of personality test then you might know that the results change over time.  As you grow, your personality adapts.  As you trade, your trading style adapts.

I used to Scalp all the time.  Then I started day trading, and swing trading, and then meddling between all 3 styles.   While I feel comfortable as a Day Trader, I'm starting to feel like Scalping again for a period of time.

As the market changes, your trading style may change.  Same goes for your lifestyle.  

It's like golf really.   As you get better with some clubs, you end up not using the others as much.  But you've had lots of practice with them.   As the course changes and your four-some changes, you adapt.

If you haven't done so already, try each approach, on a demo account of course, and see which one you are happy with the most.