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How to pick the right trading style for you

Choosing the right trading style for you might not be the easiest thing to do and it is usually based on experience. However, you can start by exploring the four main types of trading. They are named scalping, day trading, swing trading, and position trading.

 

What’s the difference between the four main styles of trading

To start with, the difference is mostly based on the length of time that trades are held for. Scalping trades are only held from a few seconds to a few minutes at most. Day trades could start from a few seconds and last to several hours. Swing trades are normally held for a few days or so. As for position trades, they are held for the longest period of time - from a few days to sometimes a few years.

 

How do traders choose the right trading style 

Picking the most suitable trading method could be challenging, especially for newbies, but it is essential to choose the one that best suits their personality if they want to succeed long-term as an experienced trader. By choosing the trading style that best suits one's personality, a person might have a better chance of being a profitable trader.

 

Scalping 

The scalping trading method is an extremely fast one. Traders who preach this style name themselves scalpers. They make trades within just a few seconds of each other, and often in opposite directions (i.e. they can sell one minute and buy the next one). 

Scalping best suits active traders that make immediate decisions and act without hesitation. This trading method suits the more impatient traders, because they expect their trades to gain immediate profit and exit the trades instantly if they go against them. 

Successful scalping requires focus and concentration. This method is not suitable for those who lose focus easily or who often find themselves thinking about more than one thing at a time. 

Recommended trading accounts for scalpers, especially scalping gold and oil, can be zero or raw spread accounts. They are both included in multi-asset broker Exness’ offering. 

The Zero account does not just offer a fixed spread at 0.0 and then has a high trading commission to account for the full trading period fluctuations. It is predominantly fixed at 0.0 except during very specific times such as roll over or brief occasions during some periods of volatility where it may rise above 0.0 for a short time. 

Exness’ Raw Spread account offers the lowest spread as compared with competitors. Traders who are using the Raw Spread accounts are offered a “stable spread”, and not just on EURUSD, but also on other instruments like Gold, Oil and even Bitcoin

The Raw Spread account is also the most stable on the market. Traders are often frustrated by the fact that they receive tight spreads some parts of the day but wide spreads during other parts, making their trading costs uncertain. Exness traders using this account can trade with confidence that the open and closing of their orders will almost always be at the same low spread, making their trading costs not only lower, but much more predictable. 

Day trading 

The day trading method is recommended for those who prefer starting and completing a task on the same day.

Many day traders would not consider making swing or position trades because they most likely won't be able to get any sleep, knowing they have an active trade that could be affected by price movements during the night. 

Exness’ Pro account is suitable for position trading, day traders and people who use longer-time based strategies. The Pro account provides the opportunity to trade smaller volumes and offers instant execution. It is ideal for any trading style, but recommended for automated trading strategies, and there is no limit on the maximum number of positions that can be opened. 

Swing trading 

Swing trading is recommended for those who are patient while waiting for a trade, but once they have entered it, they want an immediate profit out of it. These types of traders normally hold their trades overnight. This method is not recommended for those who won't feel comfortable to hold a trade while being away from their laptop or PC. It usually requires a larger stop loss than day trading, so being able to control oneself once a trade goes against them is an essential part to be considered when choosing this technique.

Exness’ Standard account is suitable for swing trading because swing traders aren't usually too concerned with spreads.

Position trading 

Position trading is the longest term trading of all and often includes trades that last for a few years or more. It fits the most patient personalities. Its targets are often several thousand ticks, so if you are the excitable type of a person, you'd rather skip this method.

Position trading also requires the ability to ignore popular opinion because a single position trade will often hold through both bull and bear markets. For example, a long position trade may need to be held through an entire year when the general public is convinced that the economy is in a recession. If other people easily sway you, better not choose this trading style.

Stick to your trading style 

Choosing the right trading style requires the flexibility to know when it is not working for you, but also requires the consistency to stay faithful to it even when sometimes it is not performing optimally. 

One of the biggest mistakes new traders make is that they tend to change their trading methods frequently. Changing your trading style all the time is highly deprecated, as it is a sure way to catch every losing streak. 

Disclaimer: Disclaimer: the publication of analysis is a marketing communication and does not constitute investment advice or research. Its content represents the general views of our experts and does not consider individual readers’ personal circumstances, investment experience or current financial situation. Analysis is not prepared in accordance with legal requirements promoting independent investment research and Exness is not subject to any prohibition on dealing before the release of analysis. Readers should consider the possibility that they might incur losses. Exness is not liable for any losses incurred due to the use of analysis.

Risk warning: trading in CFDs carries a high level of risk thus may not be appropriate for all investors. The investment value can both increase and decrease and the investors may lose all their invested capital. Under no circumstances shall the Company have any liability to any person or entity for any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to CFDs.
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