Major Forex Trading Profiles

The 3 Major Forex Trading Profiles


There are many different trading profiles that correspond to different trading needs, time frame, goals and risk exposure. An easy way to identify a trader’s profile is to ask him which chart time frame he is using. Day-traders, for example, are using the 1-minute, the 5-minute, the 15-minute or even the 1-hour chart. Position- traders are using the 1-day, 1-week, and 1-month charts. Forex can be traded also using binary options. Learn about binary options affiliate programs.

Here are the three most common Trading Profiles when Trading Forex

1) Day Traders

Day traders are opening and closing many positions during the same day. Their analysis is including exclusively technical analysis factors. They are usually after profits from 20 to 200 pips per trade. Day-Traders are holding their positions from 1-minute to a couple of hours. By holding their positions longer they are exposed to unforeseen market conditions. News developments and news may disturb day-trading and that is why day-traders are avoiding trading the market 30 minutes before and 30 minutes after important news will be released. The day traders are usually analyzing 1-minute to 1-hour trading charts.

2) Position Traders

Position-Traders aim to exploit market action that lasts for a couple days to many days. They are after returns from 200 pips to 1,000 pips. Their analysis is including both technical and fundamental factors. Position-traders don’t like the ‘Market Noise’ and that is why they try to avoid it. The leverage they are using is relatively small compared to day-traders. By executing trades using low-leverage they are able to leave a lot of space when placing their stop-loss orders. Additionally, Position-traders are exposed to the swap value of their trades. Swaps are charged by brokers every 24-hours, so if a trader opens a position that remains active for 5-days he will be charged the swap vale times 5. The swap value is determined by the difference in the interest rate of the base and the counter currency. That means that a position-trader is charged more when trading pairs at which the counter currency offers a greater interest rate than the base currency. Take for example EUR against the Turkish Lira (EUR/TRY) and the swap values of a common STP broker. If you buy EUR against TRY then you will be charged daily:

  • $0.75 for $1,000 position on a daily basis

On the contrary, if you sell EUR against TRY then you will be credited daily:

  • $0.06 for $1,000 position on a daily basis

This difference can prove great in very large trade sizes.

3) The Forex Scalpers

Forex scalpers are traders that execute tens or even hundreds of trades in a single day. Scalpers are opening positions that last from some seconds to some minutes. The may target returns of a couple pips to even 20 pips. Scalpers are based exclusively in technical analysis and they are using 1-minute to 5-minute charts. Forex scalpers are highly disturbed by the cost of trading. That is why scalpers are opening accounts exclusively to ECN and STP Forex brokers who offer tight spreads without slippage and re-quotes. Furthermore, scalpers are trading exclusively the most liquid Forex pairs, most often EURUSD and GBPUSD.


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