Types of Traders: Scalpers, Day Traders, Swing Traders and Position Trading

Best Stock Trader Type

There exists a variety of trader classifications. An individual's trader type is primarily determined by the duration for which they typically maintain their open positions.

The different types of traders also use different time frames to place their stock trades.

The various different types of traders are:

Scalpers
Day traders
Swing traders
Position traders

The sections below cover trader types. As a new trader, pick one that fits your style and the chart timeframe you prefer.

Scalpers

Scalpers are traders who maintain their positions for only a few minutes, primarily aiming to secure a small profit of 5 to 20 pips.

Quick traders are those who do lots of index trades in one day and trade indexes when the market is busiest. A quick trader might do anywhere from 30 to 50 index trades each day.

Scalpers are traders who can make fast and quick decisions.

People who make quick trades use 1-minute stock charts to place their orders, while they look at 5-minute charts of indexes to understand the market's direction and decide when to buy or sell.

Scalper 5 minutes timeframe strategy

A Scalper using a 1-minute Indices chart wants to buy, so they check the 5-minute stock chart. As shown in the example below, since the trend seems to be going up, the scalper will decide it's a good time to buy indices.

Scalper trader multiple time-frame strategy

Types of Traders - Scalpers - Scalping Trading - Scalper Trader

Day Traders

Day Trader - This category of trader maintains their positions open for several hours, though never exceeding a single trading day, typically aiming for a profit accumulation ranging between 30 to 70 pips.

Day traders do two to five index trades per day. They focus on peak market hours and close positions by end of day.

These traders use the 15 Minute charts to put their trade orders. They use 1 hour stock chart to identify the trend, if it going upwards or downward and to decide their entry and exit.

Day Trader 1 Hour timeframe strategy

A day trader eyes a long position on the 15-minute stock chart. They check the 1-hour timeframe. It matches the example below, showing an uptrend. So, the trader buys the indices.

Day Traders multiple Chart time frame strategy - Multiple Time-frame Trading

Types of Market Traders - Day Traders - Day Trade - Types of Traders

Swing Traders

Indices swing traders hold their trades for a few days to a week too, looking to lock in 100 to 400 pips in profit.

This category of trader executes, on average, between 2 to 5 indices trades per week, electing to maintain their positions open beyond the daily close. The Swing indices methodology necessitates a patient approach from traders.

This type of trader relies on 1-hour charts to place orders. Swing traders, on the other hand, look at 4-hour charts to spot trends and figure out when to enter or exit.

Indices Swing Trader H4 chart time frame strategy

A indices swing trader using 1 hour candlesticks charts wants to execute short, checks 4 H candles stock chart, it resembles the illustration explained and illustrated and shown below, since it displays the trend is heading down, the swing indices trader will then decide it's okay to Sell/Go Short indices.

Indices Swing Trader multiple Chart time frame strategy

Types of Traders - Swing Trade - Swing Traders

Position Stock Traders

Position Traders hold trades for weeks or months. Their goal is to gain a lot of pips, from 300 to 1000.

Position traders typically execute an average of 2 to 5 trade orders annually. The position indices method necessitates patience, experience, and substantial account balances capable of enduring significant drawdowns.

People who trade based on position use charts that show either one day or one week for placing their orders. They check the weekly chart to understand the trend, whether it's rising or falling, and then determine when to start and end their trade.

Types of Traders

A position trader using the daily candles charts who wants to sell, checks the weekly time frame, which looks like the example explained and shown here. Since the weekly chart time frame shows the trend is going down, the position indices trader will decide it's okay to sell – to go short.

Position trader multiple Chart time frame strategy

Types of Traders - Position Traders - Position Trading Methods

Best Trader Type

The most favored trader category or the premier Indices trader type is the position trader and scalper trader, contingent upon each trader's trading methodology, but these two approaches are the most commonly adopted indices techniques. Scalping trading necessitates individuals capable of quick judgments, whereas intraday trading is for those who wish their trades to continue for longer and have more duration when making indices trading choices. When commencing, it is advisable to experiment with indices scalping or stock indices position trading. These methods/techniques are optimal because you do not keep orders open for prolonged periods. Simultaneously, you avoid keeping trade positions open overnight, and you can trade when you have the availability to observe market fluctuations. In essence, it is best to maintain orders open as long as the market trend setup aligns with your direction, exiting promptly once the trend's trajectory begins to reverse.

In the question about which type of trading style is used by the best traders or by the top traders the two techniques & methods above are the most often used indices methods. Traders also can automate these scalping or intraday trading styles by implementing their trading strategies using automated robots.

For swing traders, leaving trade positions too long can also take up your profit & this method also requires a lot of skills so it is best to stick to the short term indices methods for most beginner traders.

Position trading is often less advisable as it necessitates a substantial account balance and can occasionally lead to significant capital reductions.

When trading indices with swing trading and position trading methods, keeping a trade open for too long can be risky. It means the trade might turn against you, causing big changes in price that could even empty your account. That's why people don't use swing and position trading methods very much. It's better to stick with scalping and intraday trading, which help you manage your money better.

It's not a good idea for a new trader to leave orders open at night: it's better to always close any open trades when the trading day is done.

Stock News Traders - Types of Traders - Stock News Trading - this type of trader makes trades when money news comes out, either guessing if the news will be good or bad, or setting up trades to happen if the price goes up or down. Using stock news is risky because prices change a lot, and it might be hard to buy or sell. You might not be able to trade, or your stop loss might not work! Using stock news can make some traders a lot of money, but it takes skill.

Robot Traders - Types of Traders - Automated Traders - the trading robot trader - automated trader is the type of trader that uses automated programs known as trading robots - EA Robots Expert Advisors(EAs) Bots to trade the online trading market. This automated trader will install an Automated Bot on their trading platform and the automated bot then will open & close trades on behalf of the trader based on the strategy which has been used to program this automated robot. If you're new to automated trading and would like to find a stock index trader using automated robots to help you as a trader come up with an automated trade robot, then you can find out more about automated trading on the Indices EAs Article - MQL5 EA(Expert Advisor) Robots/Bots Forum.

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