Since taking on this venture of forex trading, I’ve been getting a lot of questions regarding the system and strategy I use, why I take the trades I take, and overall how to trade the market.
And I generally follow by asking them to have they even decided the type of trader they are. Very few can answer this question.
An intraday/day trader is one that usually only holds a certain trade for no more than 24 hours. I’ve seen it to where some have held maybe to day 2 for a particular take profit, however set-ups are generally taken and closed within the same day.
Swing traders, like myself, tend to hold a trade for as long as the set-up provides. Meaning, if I take a trade based on a 4-hour timeframe pattern completion. That trade can be held for upwards of 3-4 days, depending on equity and when take profit is.
Position traders, only have spoken to a few, hold to a position until the profit target is hit. I’ve seen position traders hold for several months, until the major trend of the pair has reversed.
Now, I’m not stating all this from definition. My purpose of this is to briefly inform the different types of traders there are in the industry. And with, this is part of the first step in completing your trading plan, a necessary part of trading.
Your trading plan will consist of trading style, strategy, outlooks and goals, tailored to you as the individual. What you want is a form of business plan guideline for your daily trading routine. Making a routine, writing it down, and following it until it becomes habit is the key to success in forex trading. Only 5% of traders in this trillion-dollar industry make it, and I bet, they all have a trading plan.
Knowing what type of trader, you are, and have a trading plan is only a few pieces that are required to complete you trading journey puzzle, but they are very important. Take the time to research where you want to head, write it down as you figure it out, and it will change your outlook vastly.