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3 Types of traders - Which one are you?

by , 12 August 2020
3 Types of traders - Which one are you?
“Hi Timon, I was told that Pickpocket Trader is what's called a position trader. I'm thinking of becoming a member, but I first would like to understand what 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’. This is what I am with Red Hot Storm Trader and Trader X is with Pickpocket 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 such as 1 hour, 4 hours and daily.
 
Trader X and I are happy to be 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.
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Q. “Timon do you have some rules to calm the F** down after you take a loss! I have been following the 2% rule, but I still just hate taking losses when trading.”.
 
A. I can understand why you feel angry when you take a loss. It’s because we are brought up to win with everything we do. However, trading losses come with the territory.
 
You need to remember that us traders are NOT in the game to be right. We are in the game to follow a proven trading strategy (with winners and losers) and then the money will take care of itself in time.
 
Going back to your question for as you asked for ‘Calm the F** down rules’. Yes I have a 6 step plan to calm myself whenever I take a loss.
 
Step #1:
 
Close your eyes
 
Step #2:
 
Take 10 deep breaths in and out
 
Step #3:
 
Think about your winning trading strategy
 
Step #4:
 
Ask yourself why you are angry when the strategy comes with losses
 
Step #5:
 
Say “It’s only 2% of my portfolio that I’ve lost, and my winning trading strategy will make up for any petty loss in the medium run”
 
Step #6:
 
Tell yourself “I’m going to follow the strategy as I should and I will not be another losing statistic”
 
It worked for me for over a decade and I’m sure it will help you feel a little calmer and at ease after you take a loss…
 
Trade well, 
 
Timon Rossolimos,
Analyst, Red Hot Storm Trader 


3 Types of traders - Which one are you?
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