Types of Traders: Scalpers, Day Traders, Swing Traders & Position Trading
Best Stock Trader Type
There are various types of traders. The type of a trader one is depends on the amount of time which they hold their trades.
The different types of traders also use different time frames to place their stock trades.
The various types of traders are:
- Scalpers
- Day traders
- Swing traders
- Position traders
Each type of trader is explained below and as a beginner trader you can decide which type of trader you want to be based on your trading personality and the chart timeframe that you would want to be trading with.
Scalpers
The traders who are scalpers hold on to their trade transactions for only a few minutes. With the objective of making a small amount of pips in profit, 5 to 10 to 20 pips.
Scalpers are the type of traders that make many indices transactions in one day and participate in indices trading during the busiest market hours of the market. A scalper trader can open anywhere between 30 to 50 stock indices trade transactions per day.
Scalpers are traders who can make quick decisions.
Scalpers use 1 min stock charts to put their orders. They use 5 minutes Indices chart timeframe to determine the trend, if the trend is going up or down and to decide their entry and exit.
Scalper 5 minutes time frame strategy
A Scalper using 1 min Indices chart timeframe wants to go long, checks 5 minute stock chart, looks like the example explained and illustrated below, since it highlights the trend is moving up, the scalper will then decide it's okay to buy indices.
Types of Traders - Scalpers - Scalping Trading - Scalper Trader
Day Traders
Day Trader - This type of trader holds onto their trade transactions for few hours but not more than a day. With the objective of making quite a number of pips profit: 30 to 70 pips.
The day trader makes 2 or 5 indices transactions in one day, participating during the busiest times of the market & they don't hold their trading orders over-night.
These traders use the 15 min charts to put their orders. They use 1 hour stock chart to determine the market trend, if it going upward or downward and to decide their entry & exit.
Day Trader 1 Hour time frame strategy
A day trader using 15 min stock chart wants to go long, checks 1 hour timeframe, it resembles the example explained and illustrated below, since it highlights the market trend is moving up, the day trader will then decide it's okay to buy indices.
Types of Market Traders - Day Traders - Day Trade - Types of Traders
Swing Traders
Indices Swing Traders - This type of trader holds onto their Indices trades for few days to a week - with the objective of making a large number of pips in profit, 100 to 400 pips.
This type of trader makes an average of 2 to 5 indices transactions in one week, holding onto their trades overnight. Swing indices method requires traders who are patient.
This type of trader uses the 1 hour charts to put their orders. Swing traders use the 4 hour stock chart to determine trend, if it is going up or down and to decide their entry and exit.
Indices Swing Trader 4 Hour chart timeframe strategy
A indices swing trader using 1 hour candlesticks charts wants to go short, checks 4 hour candlesticks stock chart, it resembles the example explained and illustrated below, since it highlights the trend is moving down, the swing indices trader will then decide it's okay to Sell/Go Short indices.
Types of Traders - Swing Traders - Swing Trading - Swing Traders
Position Stock Traders
Position Traders - This type of trader holds onto their trade for weeks or months. With main objective of making a big amount of pips profit, 300 to 1000 pips.
Position Traders place an average of 2 to 5 orders in a year, position indices method requires those who are patient, experienced and have huge account balances that can withstand huge draw-downs.
Position traders use 1 day or weekly charts to put their orders. They use weekly chart to determine trend, if it going up or down and to decide their entry and exit.
Types of Traders
Position trader using the daily candles charts wants to go short, checks weekly timeframe, it resembles the example explained and illustrated below, since weekly chart timeframe shows the trend is moving down, the position indices trader will then decide it is okay to sell - Go short.
Types of Traders - Position Traders - Position Trading - Position Traders
Best Trader Type
Most popular type of trader or the best Indices trader type is the day trader and scalper trader depending on the method of trading of each trader, but these two methods are the most widely chosen indices methods. Scalping trading requires those that can make quick decisions while day trading is for those who want their trades to run for longer and have more time when making indices trading decisions. When starting it is best to try indices trading scalping or stock indices day trading. This methods are the best because you do not leave orders open for too long. At the same time you do not leave trades open overnight and you can trade when you have time to watch the market movements. In it is best keep orders open for as long as the trend setup is in your direction and exit immediately once the trend direction starts to reverse.
In the question about which type of trading style is used by the best traders or by the top traders the two methods above are the most commonly used indices methods. Traders can also automate these scalping or day trading styles by implementing their strategies using automated robots.
For swing traders, leaving trade transactions 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 not good as it requires a huge account balance & sometime it can result to huge draw-downs.
For indices trading swing trading & position indices methods, leaving a trade transaction open for too long, may mean these trades can reverse and move against you with a lot of pip movements and can even wipe your account, for this reason swing and position indices methods are not very popular. It is best to stick to trading scalping and day trading so as to better manage the funds in your account.
It is not recommended for the trader who is a beginner trader to leave orders open overnight, it is best to always close open orders at the end of the day.
Stock News Traders - Types of Traders - Stock News Trading - this news trader places orders during economic news release time, either guessing the news will be positive/negative or placing pending orders above & below stock market price. Stock News method is risky as volatility is massive, whilst liquidity may be non-existent. You may not get filled or, worse, your stop loss might not be honored! Stock News Trading method can be very profitable for some traders but requires some skills.
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 Bots to trade the online market. This automated trader will install an Automated Robot on their trading platform and the automated robot will then open & close trades on behalf of the trader based on the strategy which has been used to program this automated robot. If you are new to automated trading & would like to find a trader using automated robots to help you come up with an automated robot, then you can find out more about automated trading on the Stock Indices Expert Advisors Article - MQL5 EA Robots Forum.
