There are thousands of forex strategies, but you need to choose the one that works best for you. At FOREX.com, traders are grouped based on personality types and developed specific strategies for each. They've identified three trader types:
The scalper: A scalper is a trader who looks for short, minimally profitable opportunities in the market that can add up over time. If you’re a scalper, you don’t have the patience to hold a position for a lengthy period, and you grow bored easily when keeping trades active for too long.
You’re motivated by the excitement of seeing fast-moving markets, sometimes trading around major news events to realize the vast potential of a large move in a very short period of time. You aren’t happy about placing a losing trade, but you’re typically less impacted both financially and emotionally due to the small nature and frequency of trades that you place.
The swing trader: A swing trader is someone who typically enjoys staying in a trade for as little as a few hours to potentially days. If you’re a swing trader, you like the analysis aspect of trading — finding patterns that develop and exploiting them like a cunning strategist.
Because you place fewer trades on a daily and weekly basis, losing trades could have more of an impact on your psyche, so keeping your longer-term goals in mind and sticking to the plan are imperative.
The position trader: A position trader has a much longer time frame in mind than most other traders. If you’re a position trader, you could be in a trade for months or even years if your conviction is strong enough.
Usually based on a fundamental perspective of political, sentimental, or supply/demand reasoning, you brush off the fear of short-term movements. You’re much more tolerant of drawdowns and could take losses for a very long time before finally admitting defeat.
To more precisely determine what type of trader you are, take the quiz. Note: You can move between trader types. At the start, you may feel more comfortable as a scalper, but as you become more confident, you may prefer to be a swing trader and hold trades for a slightly longer period of time.
There’s no “right” or “wrong” trader type — you just need to identify the type of trader you are and trade accordingly.