Everyone is different and as such there is nobody on the planet with the same personality as you. Since trading is a psychological endeavor, you need to design and implement an approach that best fits your personality. Some traders are aggressive while others are more relaxed. Some will prefer taking many small profits while others don’t mind losing some in order to make larger gains when they are right.
There is a wide variety of approaches to analyze markets and profit from trading them. Some traders might implement multiple strategies while others focus on a particular approach exclusively. No two traders will trade exactly the same way and that is even trading the same strategy. The results we see in the Crush Pro Teams is as varied as the traders trading them.
Is this a bad thing?
Not at all!
It just makes it that much more important to know your lifestyle and personality to help identify trading strengths and weaknesses. Trying to force yourself to trade in a way that doesn’t match your personality will cause you frustration and can hinder you from making consistent profits.
Trading Styles
Scalping: This is where you are in a trade for a few seconds to a few minutes at the most. You trade between the open and close of a trading day and you do not hold risk overnight. Your main objective is to capture small profits as many times as you can throughout the busiest times of the day. You are like a surgeon going in to “scalp” profits out of the market. You make many trades in a day, even hundreds, seeking small profits.
In order to implement this trading style you have to be glued to the charts and sometimes give it hours of your undivided attention. It requires intense focus and quick thinking to be successful, not to mention a fast computer, fast internet connection, and a broker with tight spreads who can execute your orders at lightning speed. High Frequency Trading has been popularized recently, and you are battling the robots who don’t make mistakes.
You might be a scalper if you like fast trading and excitement, you don’t mind being focused on your charts for several hours, you are impatient and don’t like to wait for trades to develop, you think fast, change your bias or direction quickly and you say NO to going to bed with open risk.
You might NOT be a scalper if you easily get stressed in fast moving environments, you can’t commit several hours a day to your charts, you’d rather make fewer trades with larger profits or you like taking your time to analyze the overall picture of the market.
Day Trading: This is a popular trading strategy where you use a very small timeframe to take one or two trades in a day and close them out by the end of the trading day, You choose a market that interests you based on your analysis and trade it with the intention of closing the trade with a profit or loss by the end of the day. Like scalpers you don’t hold trades overnight.
Day trading is good for traders who have enough time to analyze, execute and manage a trade throughout the day. If you think scalping is too fast but swing trading is too slow, then you might be a day trader.
You might be a day trader if you like beginning and ending a trade within one day, you have enough time to analyze the markets at the beginning of the day, you can monitor it throughout the day and you want to be out of the market win or lose at the end of the day.
You might NOT be a day trader if you like longer or shorter term trading, you don’t have time to analyze the markets and manage trades throughout the day or you have a day job.
Swing Trading: This is a medium-term style of trading used by traders who want to profit from price swings. Markets don’t move in straight lines, they swing by moving in one direction for a while and then moving in the opposite direction for a while, and finally continuing in the original direction or trend. Price swings come in all shapes and sizes. This type of trading requires patience to hold trades overnight to several days or weeks at a time.
This is ideal for those who can’t monitor their charts throughout the day but can devote a little time every night to analyze the markets. Swing traders identify the major trend and enter trades on swings (pull-backs) against the trend or they enter on swings to profit countertrend.
Because trades last long than a day, larger stop losses are required to withstand the volatility or noise of the intraday fluctuations. Often trades will start out moving against the trader in the beginning of the trade. Remaining calm and trusting your analysis during this period is essential. Since trades will have larger targets, the spread doesn’t have much of an impact on overall profits so markets with larger spreads can be swing traded.
You might be a swing trader if you don’t mind holding trades for several days, you are willing to take fewer trades but trades with a higher probability of success, you don’t mind having larger stop losses, you are patient, you can remain calm when trades move against and you are willing to go to bed with trades at risk.
You might NOT be a swing trader if you like fast paced action packed trading, you are impatient and want to know immediately if trades don’t work out, you get sweaty and anxious when trades move against you or you can’t spend even an hour a night analyzing markets.
Position Trading: This is the longest-term trading and can have trades lasting for several months to several years! Position traders ignore short-term price movements in favor of identifying and profiting from longer-term trends. This style of trading is the closest to “investing” though position traders actively manage their trades and will go short as easily as go long where traditional investing refers to holding positions that are only long.
These guys are super patient and have a good understanding of the fundamentals. Because the trader will hold the position for a long time, stop losses will be very large but the profits will be even larger. They are willing to give back a large portion of their profits and be confident that the trend will carry the price to huge profits.
You might be a position trader if you are an independent thinker ignoring popular opinion for your own view of where the market is going. You have a solid understanding of fundamentals and good foresight into how they will affect the market you are trading. You have thick skin and can withstand any retracement you face. You have large enough capital in case there are large swings against your position. You don’t mind waiting for the huge rewards and have the patience and calmness of Yoda.
You might NOT be a position trader if you easily get swayed by popular opinion, you don’t have a good understanding of fundamentals or you think they are called funny-mentals, you aren’t patient, you don’t have a large starting capital, you want to see results fast or you don’t want to give back large profits waiting for the huge profits that might not come.