July 27, 2010
Different Types of Traders have different trading goals and different levels of risk
– Which is the best way of trading?
o Scalping? Day Trading? Swing Trading?
– Scalper:
o Lots of trades each day (10-20)
o Low risk per trade
o Low profit per trade
o Low Risk/Reward Ratio
o Goal = get in and out during the day to pick up little moves within the larger moves
o Chart = 4-range
– Day Trader: (best place to start)
o Lots of trades each day (5-10)
o Low risk per trade
o More profit per trade because we use a RUNNER
o Low Risk/Reward Ratio
o Goal = look for the intra-day moves and try to buy when the market rises, and sell when it falls.
o Chart = 4-range, 8-Range, 13-Range
– Position Trader
o 1-2 trades per day
o More profit per trade because we use a RUNNER
o Low Risk/Reward Ratio
o Goal = determine the direction of the day, and follow that direction, never holding overnight
o Chart = 13-Range, 21-Range
– Swing Trader
o 1-5 trades per week, month, quarter
o More profit per trade because we use a RUNNER
o Low Risk/Reward Ratio
o Goal = determine the WEEKLY direction and trade in that direction, looking to hold your trade possibly for months on end.
o Chart = 34-Range, 30-Min, 60-Min, Daily, Weekly
So which is better for YOU?
Small trade accounts should start with day trading.
Larger trade accounts greater than $10,000usd can trade anything!
You also need to identify the RISK on each trade when deciding which is best for YOU.
Are you able to handle a stop loss?
Would you have a hard time with a 20-tick stop?
if so, a position or swing trader MAY not be the best fit.
Traders than can handle larger losses will be better suited for scalping and swing trading.
If you cant handle losses, stick to tight stops with our easy day trading method called the ‘Fast Track’.
Questions? JJ@SchoolOfTrade.com
