17 Proven Currency Trading Strategies: How to Profit in the Forex Market, + Website

Chapter 5

Play It Your Way

Understanding Your Profile

This chapter provides insight into the five different categories of forex traders: scalpers, day traders, swing traders, position traders, and mechanical traders. After reading it, you will understand the differences among the five and the three advantages of each category. This chapter also includes a test to help you determine which category you belong to. Once you discover your category, you will learn how your personality can help or affect your trading.

I have had the privilege to speak to large audiences all over the world. The most common question thrown at me is “Should I buy now or sell now?” Each time I hear the question, I can’t help but smile. After all, that was my biggest question when I first started trading forex. “Tell me what to do now, and we’ll talk about trading later!”

My answer, as always, goes like this: “You can buy now if your trading strategy tells you to buy now. You can also sell now if your trading strategy tells you to do so.”

This answer always draws one of two responses: confused looks or exasperated ones.

However, the answer is precisely that—you can buy or sell at anytime. Let’s see why.

As shown in Figure 5.1, Trader A goes long at Point X and exits at Point Y. Simultaneously, Trader B goes short at Point X but exits at Point Z. In both cases, each trader ended up with a profit.

FIGURE 5.1 Traders Making Profit at Different Exit Prices

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