There are several ways to classify traders – according to strategy, market behavior, and trading psychology.
Types of Traders by Trading Style
1. Scalping
An intraday speculative strategy that involves making multiple trades in very short timeframes. Scalpers must spend several hours a day in front of their monitor, searching for profitable trades. To become a scalper, you need lightning-fast reflexes, perseverance, and concentration, as well as plenty of free time and nerves.
Features:
Choosing the most liquid instruments; the most volatile pairs are needed, offering the greatest opportunity to open trades.
Trading is conducted primarily during market hours during the closing hours. 2. Day trading
An internal strategy that provides for closing all positions by the end of the day without transferring them overnight. It differs from scalping in the smaller number of transactions and their longer duration. Well suited for those who have free time to analyze and track transactions, but do not want to constantly monitor open positions.
Features:
It is necessary to periodically monitor open positions.
Monitor economic statistics.
3. Medium- and long-term trading
A strategy in which trades are opened for days, weeks, months, and even years. This type of trading requires immense patience and calm. Time is a definite advantage. He needs to constantly monitor the chart and take local news into account.
Features:
Large stop orders to wait out price movements against the trade, which also requires a large deposit.
Minimal time investment in trading.
Profit/loss target of several hundred/thousand pips.
Types of traders by market behavior
Bears sell assets with the expectation of later buying back the same asset at a lower price. The resulting difference constitutes the profit for this group of traders. This tactic is justified in a pronounced downtrend.
Bulls profit from price increases, thereby contributing to this. The main technique is buying up assets that are expected to increase in value, with the goal of reselling them speculatively.
Sheep act spontaneously and without thought, making trades based on emotion and without rationale. Everyone cheats sheep, replenishing their deposits with their losses, hence the analogy.
Pigs are a common name for decisive and greedy traders. They tend to constantly take risks and make emotional trades that violate many rules, hoping for big profits. Occasionally, they make a good profit, but most of the time, the pig walks away empty-handed.
Chickens are overly cautious and cowardly traders. They lose money due to indecision, missing profitable entry points.
Whales are systematic traders who treat trading like a business. They are calm and level-headed, manage risks, and make balanced decisions about opening a position.
Types of Traders According to Trading Psychology
Intuitive — makes decisions based on their intuition, independently assesses the situation, and is not guided by the opinions of others.
Intellectual — uses fundamental and technical analysis when making decisions, is able to assess the situation and draw the right conclusion.
Instinctive — follows their instincts. Makes decisions in the heat of the moment, observing fluctuations in the chart, or "jumps on a departing train."
