Trading Styles in Forex for Different Trader Personalities

When you indulge yourself in forex trading, you will find it synchronizing with your personality. You will automatically prefer one of the trading styles that suits your personality best. You can be a long-term trader, a short-trader, or somewhere in between. But it makes a big difference as it matches with your personality traits.

What is a Trading Style?

It is the way each trader chooses to trade. There are four main types of trading styles, and they can be adapted according to the personality and lifestyle of the trader. If it is chosen against the personality, it can lead to multiple difficulties. On finding the right style, the trader can work on it for the long term.

Trading Approaches:

Before we go further, this should be clear that there two trading approaches to trading style: discretionary and automated forex trading. In the discretionary approach, the trader takes matters in his own hands. He uses his discretion and judgment to manage and execute the trades. Whereas in an automated approach, a computerized system is developed by the trader based on some basic algorithms. The trader then follows that system to make trades.

If the trader prefers to be in control of all the trade-related decisions, the first one is the best choice. But if the trader prefers algorithm and set rules to work, automated forex trading is the preferred one. All the trading styles have either of these approaches.

Different Trading Styles:

Following are the basic four styles that can be chosen based on the trader personality and work preference:

1.   Scalping

It is a rapid style of trading. In scalping, the trades are often done with just a few seconds difference. It is best for people who know how to make last-minute decisions and execute them without any hesitation. A successful scalper is the one who focuses and concentrates immediately.

2.    Day Trading

Day trading is also known as Intraday trading.If you are someone who prefers starting and completing a task in a day, then it is for you. Day traders start every morning and close their trades every night. They don’t like to keep their trades hanging all night, knowing that they could be affected by any rapid movement.

3.    Swing Trading

This trading style is for people who have a lot of patience when it is about waiting for the trade. But once they start the trade, they want it to become profitable within a short time limit. For people who are comfortable holding their trade while they are not at their desk, this is the one.

4.    Position Trading

Position trading lasts for several years. It is the longest of all. It is only suitable for you if you are the least excitable and very patient. Also, the traders of this style don’t listen to popular opinions. They stick to the trades they made.

Bottom Line:

When you have chosen your style, stick to it. The biggest mistake traders make is changing their trading style at the first sign of trouble. What you need is commitment and loyalty to the style you choose.