There are many kinds of traders varies in the form of trading durations. There are no right or wrong on the duration you choose to trade. Some prefer longer term trading and some prefer short term. Let’s look at the pro and cons of each.
Scalping
I have to admit it, there is a scalper in me. I think there is a scalper in many traders. Scalping is basically trading very small time frame, within seconds to few minutes, and taking small pips for profit. Although many traders are against scalping, but I think this can be a complementary trading technique while you are trading other durations. Who can resist the thrill of getting small earning from the markets within seconds? The advantage of this method is fairly short time needed. The disadvantages is loss comes quickly too. A proper method is needed to be successful in scalping. Another disadvantage is spread have high impact on our profit target. Usually scalping best suitable for pairs with less spread, such as the EU.
Day Trading
Also called intraday trading. The trade usually last for several hours. Usually day traders will exit the trade by end of the day to avoid rollover cost and overnight risk. The advantages intraday trading are faster profit, and smaller risk. However the profit target is also smaller for this duration. The duration is not quite short for day trading and it’s harder to master. I have been learning for a while and still can’t get much profit on day trading. If manage properly this is a very profitable trading style.
Swing Trading
This is trading that last for intermediate long period. Usually a trade will last from within a day to few weeks. Majority of traders are using this trading style. The risk can be manage properly too. We do not need much time in front of computer to look at the chart. This gives us more time for our daily life. This is also less stressful to our mind compare to scalping and intraday trading. One disadvantage is that there is rollover cost when each trading day ends. This trading method is not easy to master too.
Position trading / Long term trading
This is long term trading. It is easiest to learn, and can get more pips in a single trade compare to shorter terms. Many successful traders are position trader. In this type of trading, very less time is required to monitor the chart everyday. This gives us more time in our life. Some traders only make one or two trade within a year. The disadvantages are we need to calculate the rollover cost, and the risks are larger. This is because with larger time frame chart, we need to set larger Stop Lost to prepare for smaller market move against the main trend.
There is no perfect trading style. You may find the one that suits you most. Hope this post will give some general pro and cons of each trading style and you can find the one that fits you most.
