Tag Archives: swing trading

What`s your trading style?

what-is-your-trading-styleBecause there isn`t a precise definition, these are considered rather general trading styles.

Scalping (very short-term)
Scalping is a trading strategy in which a trader is trying to gain small profits in a very short period of time. In general, these trades are made on very short time, from a few seconds to a few minutes, and involve an increased risk. In order to have a higher gain is required to trade with the smallest spread possible. As the spread gets higher it will be harder for a scalper to gain profit.

Day trading (short-term)
Day traders usually open positions in the market from several minutes to several hours and they don`t hold open positions overnight. They typically use very short-term charts such as 15 minutes charts.

Swing trading (medium-term)
This is a medium-term trading style and it implies opening a position for a few days or even a week or two. Swing traders usually use a 4 hours chart for this trading style.

Position trading (long-term trading style)
They usually keep their positions open for a longer period of time compared to Swing traders and can last from several months to a year and more. They tend to focus mostly on 1 day charts.
A carry trade is a transaction based on the difference between interest rates (sell currency with a lower interest rate to get a better return on the currency with higher interest) and may take several years and more (but no less than a few months).
This type of traders will use charts focused on a longer period of time if his position will be based on a longer term (1 day or 1 week charts type). I believe it`s important that every trader should start using long-term charts at least to determine the overall trend, and also support and resistance levels.
Keep in mind that a Day Trader doesn`t want to use a 15 minutes chart to open a trade and keep it open for several days. (I strongly recommend you to avoid thinking like a day trader in this case).
Otherwise, if you are a swing trader you don`t want to use a 1 hour chart and to close your trade after 15 minutes.
So in other words, make sure you use time frames suitable for your trading style. I suggest that you go for a medium or long term trading strategies because your analysis are much easier to make and also more accurate.

Good luck!