Oftentimes one of the first concerns with which a trader is confronted is deciding on their trading style.
While one certainly does not have to trade in only one style (in fact, we encourage traders to try several styles at the outset), there is merit in zeroing in on a specific trading style and learning its “ins and outs” under various market conditions in close detail.
Below are some considerations…
What type of personality/emotional make up do you have?
If you are a person who prefers a very rapid pace and who generally expects quick results and seeks fairly immediate gratification in general, you may be best suited for shorter term trading…scalping.
If you are a person who is not a fan of a fast paced environment and is no stranger to practicing patience and discipline and is quite comfortable with results that may not manifest themselves until a bit of time has passed, you may be more inclined toward medium term/swing trading/longer term or position trading.
Since the size of one’s trading account will impact their trading style, what size trading account were you planning on having?
Trader’s having larger accounts are better positioned to trade shorter or longer term. Very short term trading (scalping) benefits from the ability to open a greater number of positions at a time to maximize moves that are comprised of a small number of pips. Naturally, a larger account size facilitates the opening of a greater number of positions.
Longer term traders will also benefit from having accounts of larger size since their stops generally will need to be quite deep to absorb the strong bullish and bearish moves that their trade will need to endure over time.
Traders having smaller to more modest size accounts may find that medium term/swing trading is more suited to the size of their account.
The grid below will provide some additional insight relative to determining one’s trading style…
Longer Term/Medium Term Traders –
Shorter Term Traders –
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Richard KrivoTrading Instructor