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4 types of forex traders: Which one is the Best?

Golden Option Blog
In this blog article on 4 Type of  Forex TradersWe will talk about the different types of traders, what are they, how they differ from each other, and how they are traded, what you should look for and if they are either more focused on fundamental or the technical analysis. We will also tell you what type of trading we do and like the best for our strategy.

Here's what we are going to cover: 

          1. Scalpers
          2. Day Traders
          3. Swing Traders
          4. Position Traders
5. What we do at Golden Option?


There are actually four types of traders - the scalpers, the day traders, swing traders and position traders. I will explain all of them in this blog.

You also have investors, but investors are not traders as they hold on to their positions for more than 12 months. So under the period of 12 months, let's break down by starting with the ones that are trading the most frequency.

1. Scalpers

The first one that is trading with the most frequency are scalpers. The scalpers basically it is people, sometimes it's algorithm aka robots, but its people trading multiple times a day with very low Take profit (TP) and Stop loss (SL).

This model of trading is known as scalping. Here we're talking about 2, 3 pip Stop loss and 6, 7 pop Take profit. Sometimes it can be 10, 15, 20 pip Take profit that's also be considered as scalping.

What defines them is they basically trades at lower timeframes like 1 min chart, 5 min chart. They usually don't higher than the 15 min chart and most of them trade the 5 min chart.
Scalpers are more focused on technical analysis.

2. Day traders

Then after that you have the day trader. As the name suggests they don't trade more than a day, and could have many trades a day.

The main difference between a scalper and a day trader is the fact that most day trader will trade at a certain period of the day, like in the New York Session or the London Session.

Day trader can have multiple positions per day or have multiple trades per day or just sometimes one trade per day.

But it's someone that is trading every single day and doesn't hold overnight positions, who doesn't trade more than one session among the three major forex trading sessions.

Day traders are also more focused on technical analysis but they look for major news and are aware of the major news which will impact their trade. 

3. Swing traders

Swing traders trade in a more lesser frequency. Their trades could last starting from a minimum of a few hours to a few days and could even last a few weeks.

Most swing traders hold their trades more than a day. But if the volatility is high, the trade could end up in a few hours. Most of them look at time-frames such as the 4 hours time-frame, the daily time-frame and the weekly time-frame in their chart.

Swing traders are focused on both technical analysis and fundamental analysis. 

By the way If you want to know more on What time-frames are the best and what we focus on the have a Look here on our Time-frame article

4. Position Traders

The last one is the position traders or a long term position traders. Position traders would be someone who took one or two trade per month, or sometimes maybe no trade in a month.

When he is trading he's gonna hold it like a minimum of 2, 3 weeks and sometimes he's gonna hold for 2, 3 months or for 5, 6 months. 

And if the trade is longer than 12 months then it's considered an investment. That is by the law of most countries. That is how they charge you taxes and stuff.

For example in Canada, if you own bitcoin or any crypto or even a forex trade for more than 12 months that is considered investing by the gov. and they charge you a 20% tax on your investing income.

Position traders are more focused on fundamental analysis, like the geopolitical concerns, the health of the economy of the countries that they are trading their currency and such 

What we do at Golden Option?

At Golden Option we focus on Swing trades mostly and our team members are all swing traders. It's not that there are no day trades for even once.

If the setup permits or the price moves fast and hit our target then, it turns into day trades automatically. But, we are swing traders and we love it, as it allows us more room to breathe with our analysis until they go to the side we expect it to be.

Doing both Fundamental and Technical analysis is the best way to trade in any type of trading.. Be it Forex, Stocks or Options, etc. It has way more potential and winning rate as compared to other types of trading. And If you only focus on the fundamental then you are like being handicapped.

We speak this through our years of experience and knowledge. Moreover, you don't need to keep watching your chart every 15 minutes and confined at your screen all day.

Hence, we come to the conclusion that Swing trading is the best type of trading as compared to others as far as we know.



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