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The Different Types of Traders

1. Scalpers
Scalpers are the ultimate short term traders. They operate in even smaller time frames than day traders.

Capital: Scalpers will need a steady flow of money for them to take advantage of any opportunities that pop up in the marketplace.

Target profits: Scalpers don’t rely on large trades for their profit, but rather small gains multiplied over a large number of small trades.

2. Day Traders
Day Traders live their trading lives one small chunk at a time. They’re the guys who aim for short term trades, usually for periods of less than 20 minutes.

Capital: Often, one of the reasons day traders trade the way they do is that they don’t have that much capital to absorb early losses.

Target profits: Day traders don’t leave positions open for very long, so they are rather limited with their potential profits. These kinds of traders usually profit on volume rather than home runs.

3. Swing Traders
Swing Traders hold trades for longer periods, usually up to a few days.

Capital: Swing traders will need more capital than day traders to weather the storms of volatility that will inevitably come their way.

Target profits: Due to the longer time frame of open trades, swing traders can potentially earn a larger profit, with up to hundreds of pips per trade between opening and closing of positions.

4. Position Traders
Position Traders are the guys with the largest capital. They can hold trades for up to years depending on their trading strategy.

Capital: These traders will experience the extreme ups and downs of the market, and they will need to have enough capital to weather the strongest storms.

Target profits: Due to the luxury of being able to follow long term trends, these traders can often earn up to thousands of pips per trade.