Have you ever asked yourself what kind of trader you want to be? If you haven’t, it’s important that you take your time to decide which timeframe you’re most comfortable with trading in. Yes: the timeframe you like to trade in will determine the type of trader you’ll be. Here are 4 of the most popular types of traders: scalper, day trader, swing trader or position trader. Let’s go into a little more detail about them in this article.

Are You A Scalper?

Before you can trade profitably, you’ll first need to have a reliable trading plan. Almost everyone knows that. After all, your job as a trader is to follow your trading plan, isn’t it?

While this may be a shamefully obvious fact, you’d be surprised to know that many Forex traders don’t follow this simple piece of advice! Not surprisingly, these are the same traders that usually wipe out their trading accounts in a short period of time.

Always remember: Your job as a trader is to follow a trading plan!

…and guess who’s going to write this trading plan?

In choosing the right time frame to trade in, you should consider whether you enjoy the immediate (and sometimes instant) profit and loss consequence of trading in the short term, or if you prefer to establish positions and see them unfold over the next few days or weeks.

Trading In Short Time Frames

Trading in short time frames requires substantial time and your total attention because timing is of the utmost importance. Opportunities are created and lost in a manner of seconds, and a distracted trader will often find himself entering or exiting into positions at the wrong time. If you do not have the inclination to devote your exclusive time and energy in monitoring minute and hourly charts, you may not wish to consider becoming a short time frame trader.

Whenever I tell people I trade currencies, they would widen their eyes and go, “Wow, so you’re a trader, huh! You must make at lot of money!” They look at me as though I possessed some rare talent that enabled me to become a profitable trader.

A vast majority of the uninformed public thinks that successful traders are a different breed of person. They seem to view traders as high risk-takers who constantly tread the thin line between glorious success and utter ruin.

The honest truth is unfortunately (or rather, fortunately) a lot less exciting then they think.

It’s a common misconception among new traders that one needs to win in most of their trades in order to become profitable. As much as this sounds ideal, it’s unfortunately quite far from the truth about how traders really make money…

You see, all traders will have “good” days and “bad” days. It’s inevitable. No trader will always have a “good” day every day for three months consecutively.

Some days you’ll make small profits, and some days you’ll make small losses. Other days you might also make large profits, BUT never, ever make large losses.

Forex traders live from moment to moment. With today’s advanced technology that gives us tick-by-tick live price feeds, we are constantly looking at the trading charts at all times of the day… and we start to become obsessed with every single price fluctuation.

In this climate of rapidly changing market prices, it’s not easy to trade while keeping ourselves focused on the big picture. Unfortunately, focusing on the big picture is essential for sustained profitability as a trader.

Forex trading can be a very lucrative activity for retail traders. We’ve all heard about traders that make a few thousand dollars in only a couple of hours – which makes trading sound like easy money! Unfortunately, what we don’t hear about quite as often are the traders who lose twice that amount, in only half of that time.

With such large amounts of money so easily won and lost every day in the currency markets, it’s no wonder that so many people think of Forex trading as nothing more than a legalized gambling activity.

I think many new traders doom themselves to failure even before they open up their trading charts. They buy into all the marketing hype that’s been fed to them, and they think they can easily get something for nothing.

I hope you realize that trading, like almost everything else in life requires substantial time and effort before you can enjoy the benefits. If you have money to spend on training courses and personal coaching, then great, you can cut down on the amount of time needed to learn to trade profitably. If you don’t want to spend money, you’ll just have to spend more time learning through experiments (demo trading) and through free information. There’s always a trade-off between money and time: you often have to spend either one. You can’t save on both at the same time.

It is often said that a trader’s psychology is the most important aspect of profitable trading. ‘Patience’, ‘discipline’ and ‘having a system’ are just some of the most commonly touted characteristics of great traders.

But while most traders are aware of these traits, many fail develop them. Why? Is it really that difficult to just sit there and have the patience to wait for a favourable trade setup? Is it hard to avoid entering into unnecessary, low probability trades?

I think the answer is no, it’s really not that difficult at all… but only if your aim is to make money.

Many people think that Forex trading is an exciting and sexy activity. Unfortunately, this is only true for the losing traders. To the people who actually make money, Forex trading is a boring and dreadfully repetitive. Why is this so? In this article, I’ll discuss what it takes to be a successful trader, and you’ll understand what I mean.

Skill #1 - Self-Assessment

Good traders don’t give excuses when trades go bad. They will always look within themselves and ask, “What did I do wrong?”; “How can I improve the way I trade?”