3 Types of traders – What is the difference between a scalper, intraday trader and position trader is. Could you briefly help me with these terms?
A. Sure, these are the three main types of traders that exist. And it’s important to find which style suits your trading personality best.
The first type is a ‘Scalper’. A scalper trader is someone who buys and sells a financial market a couple of times a day.
You can say, they scalp in and out of their trades in a single day. Normally, these traders trade on much shorter time frames from 1 minute, 5 minutes and up to 15 minute charts.
The second trader type is an ‘Intraday trader’.
An intraday trader is exactly that. It’s someone who uses any time frame but holds a trading position only in the day and NEVER overnight.
There are number of reasons for not wanting to hold a trade overnight including:
They don’t wish to pay incurring costs while they hold positions over night
They don’t want to go to sleep knowing the market can jump against them where they can lose more that what they expected.
There strategy works best during the designated hours they decide to trade.
Finally, there is a ‘Position trader’. A position trader, is one who is happy to hold positions over a longer period of time. These type of traders lean more towards longer time frames from a couple of hours, days or weeks.
As Position traders as we can:
Take less trades in a week, and have time to do other things.
Not have to stress about closing a position at a certain time (as we have stop losses and take profits in place to take care of it for us).
Check the markets once a day or once every few days to see how the trade is performing.
What is the difference between financial instruments and financial markets? Or are they the same thing?”
A. Great question. Even many analysts get confused between the two terms, so you’re definitely not alone…
Financial markets are a variety of world markets where traders, investors and institutions can buy or sell in order to bank profits…
In other words, a financial market can be anything that is invested or traded from stocks, indices, commodities, currencies and crypto currencies.
Financial instruments on the other hand, are the financial vehicles that are provided by brokers and market makers, in order to facilitate the trades with the chosen financial markets.
Financial instruments are for example, CFDs, Futures, Options, Warrants, Spread Trading and ETFs…
In conclusion: A trader can buy or sell any financial market (stocks, indices, commodities, crypto & currencies) using any given financial instrument (CFDs, futures, Spread Trading, options etc…).
