Various factors separate a normal forex trader to a high earning forex trader in the forex market. Some key aspects include timing, intelligence, instincts and guts.

There are various types of forex traders who in turn have an equal number of various time frames. These time frames assist forex traders in coming up with new ideas as well as implementing their strategies.

For a trader to perfect and enhance the relevant trading skills in the forex market to a noteworthy level it is advisable to embark on learning time frames. Grasping the knowledge about time frames and how to make use of them can give the trader an edge over other traders.

Forex traders can wholly be categorized into six main types. They entail the day trader, the swing trader, the position trader, the scalper, the algorithmic trader and lastly, the event-driven trader. All these types of traders will be discussed below. 

1.    The Day Trader

This trader is regarded as the most desirable trader of the three groups. In a lay man’s language, these traders only trade for the day. These are traders who implement their trades in an intraday timeframe.

These forex traders normally hold their currency pairs after the market session has closed thereby only trade in a high stake manner. The main aim of this trader is to anticipate a fast turnover on single or multiple trades with a transaction magnitude spanning 100 times the normal rate.

For this matter, the trader realizes a profit from a small margin. This, therefore, entails the use of shorter time-frame charts. These traders also depend on technical trading mechanisms and volatile currency pairs to make a profit.

These traders desist all long-term strategies only applying for short-term opportunities.

2.    The Swing Trader

The swing trader is different from the day trader as this type focuses on longer time frames. The strategy involves holding a currency pair for a longer duration thereby get a shift in the forex market. This shift change is anticipated with the hope that the change will be advantageous to the forex trader.

Some of swing traders use Harmonic pattern trading which they analyze and anticipate the pre-define patterns detected by MT4 Harmonic Pattern Scanner which scan all the pairs in all time-frames in one monitor.

Timing, in this case, is highly favored and utilized in this case as compared to that of a day trader. However, like the day trader, this trader also prefers technical analysis of fundamental analysis.

By using the best Harmonic pattern scanner, traders could define the price reversal which in most case followed by length movement (especially in higher time-frames like D1) and give the trader bigger potential profits.

3.    The Position Trader

Is considered as the longest time frame from the two timeframes stated above. This trader distinguishes from the other forex traders from the analysis and perspective done in the market. These traders take long positions on the forex market analyzing long term market shifts thereby focusing on a long-term plan.

These traders will undertake technical formations but strictly follow fundamental analysis models and endeavors. These traders, therefore, look at aspects such as economic environment, government decisions of a particular country and interest rates in their analysis.

This wide range of considerations places the position of the forex trade in the major currencies traded in the market.

Position trader often use MT4 indicator and also trading robot like Forex Diamond EA to help them achieve a stable profit in long term. The profit may not so fantastic (unless they took a higher risk), but the profit more likely can be stable in long term.

4.     Scalpers

These are traders are short-term forex traders who hold short positions in the market platform. Forex scalping strategies entails making numerous trades during the day to get little profits at the most engaging period.

Scalpers always have the duty of constantly analyzing new information and adjusting to the abrupt market changes. These traders usually have quick-thinking skills, observant and knee-jerk skills; however, these traders are always under pressure in the forex world.

To maximize the scalping strategy, traders need to first test the strategy with Forex backtesting software in many different periods and many pairs (if they prefer to trade multi-pairs).

5.    Algorithmic Traders

These are the kind of traders who solely depend on computer applications to conduct trades on their behalf in the forex market. These applications are meant to perform the trades on behalf of the trader.

The forex traders can either make use of a defined set of instructions or a high-language trading algorithm that forms the application or buys an existing product. These traders as an additional fact are very observant in technical analysis charts.

This type of trading is concerned with those forex traders who are technology savvy and are comfortable applying it to the market platform.  

6.    Event-driven Traders

These traders completely focus on the fundamental analysis, therefore, disregard technical analysis charts to help in the decision-making process. Their satisfaction comes from the shifts caused by political and economic aspects such as the GDP, an election period in a given country, employment data, and Non-Farm Payroll.

This norm of trading is catered to people who are always abreast with global news and who will critically acknowledge the impact of those events in the forex market. Attributes such as curiosity, inquisitiveness and proactiveness are a common norm to such traders.

The trader is therefore skilled at analyzing new information and data. These skills will, therefore, assist the forex trader make predictions on the effect the news will have in the forex market both locally and globally.

The types of traders in the forex market are distinguished depending on the time taken in trade and the personality traits that define that trader concerning the forex market.