Which Trading Method Suits Your Character?
When it comes to trading, from forex to stocks and shares, and whether you are based in Europe or the Arabic world, there are many different strategies and styles which can be used. Some traders like to employ a mixture of these, while others stick to just one that best suits their aims, lifestyle and other circumstances. If you’re thinking about starting to trade on the markets then this guide provides you with four of the most popular trading methods which suit a variety of different styles.
Impulsive and Fast Decision Makers
Scalping is the quickest trading methods, whereby profits are taken on small price movements. Usually lots of little gains are made throughout that build up to a big profit (all being well). This is ideal for traders who are impulsive, as many quick decisions are required, with any hesitation possibly resulting in a missed opportunity or the wrong decision being made. Those short on time will benefit as well, though plenty of focus and concentration is still required.
Impatient and Perfectionists
For those who still want to make quick trades and cannot leave any task unfinished, day trading could be the way forward. Here any trade that you open will be closed by the end of the day, whether it has made gains or not. Day traders do not like to leave any positions open when they go to bed, due to lack of patience and having to finish what they started. This does mean that overnight price movements will be missed, which can see potential gains but also losses avoided.
Calm and Considered
Swing trading is the most appropriate trading strategy for those who have the patience to wait for a trade to become profitable. Trades are rarely closed on the same day, with most swing traders keeping positions open overnight to aim for the best returns. Because of this, a larger stop loss is often required when swing trading. Keeping calm when a trade isn’t going your way is vital.
Incredibly Patient Traders
The longest term trading method is position trading, where some positions can be open for a number of years. Of course this requires immense patience and is not good for those who get excited easily. Being able to withstand the ups and downs of a bullish and bearish market is essential, as whatever you’re trading will likely experience these but hopefully pull through for a decent profit.
Decide which of these strategies best suits your character and begin trading in the most natural way for you.