Types of Traders- Merits & Demerits : Find Where You Stand !

2020年11月5日

1. Scalp Trader : This type of trader, trades the entity when the price occillates (up and down) in a given fixed range. Depending upon the scalp setup, scalping can be done in low time frame (5 min, 15 min, 30 min) as well as in high time frame (4h, 6h, 1d).

Merits :

• multiple trades can be executed with the same plan.
  
  

Demerits : Setup is valid only in ranging market.
Risk of several stop loss hunt.

Chart Example :


2. Pattern/Breakout Trader : This type of traders, trades the entity according to market price structure (patterns). They enter in trade as soon the structure breaks or breakout happens.
In general, higher time frame patters are more reliable than lower time frame patterns.

Merits :
*It is simple to trade

Demerits :
* It is difficult to filter out between real breakout and fake breakout, in live market conditions.

Chart Example :



3. Swing Trader : This type of taders, trades the entity from local swing high to local swing low (short) or from local swing low to local swing high (long).
They usually hold their position for days to weeks.

Merits :
*High time frame swing trader spend less time infront of the trading screen.

Demerits :
*Setup fails in strong trending market.


4. Positional Trader : This type of trades, trades the entity according to higher time frame trend (D/W/M) and usually hold their position for few weeks to months.

Merits :
*Compounding profits can be gained.
Offers good risk to reward.
Ideal for busy professionals.

Demerits :
*It takes longer time to play.
Emotions are hard to control for novice traders.