There are as many different trading strategies as there are traders in the world. However, despite all this variety, all traders fall somewhere on the trader type spectrum based on the frequency and speed of their trades.

Understanding the trading type that best suits your personality is essential to becoming a successful trader.

The Tortoise and the Hare

On one end of the trader type spectrum you have the hare. This trader makes a number of small and fast trades each day, looking to book a large number of small profits.

On the other extreme end you have the tortoise, who will take a few large positions that last days, months or even years, as they wait for the market to come around to the long-term trends that they have identified.

These are drastically different approaches to trading that require a certain temperament, character and skill-set to be successful.

If you lack patience and enjoy thinking on your feet, then long-term trading will bore you to tears. On the other hand, if you prefer calm analysis and waiting to be proven right, then short-term trading will turn your stomach.

This is why it is so important to choose the right trading style that fits your personality.

Day Traders and Scalpers

Day traders and scalpers make intraday trades based mostly on technical analysis, though it is important to understand the fundamentals that are driving the general trends of your trades. These traders are looking to make a number of small profitable trades based on identifiable patterns of price action within larger price trends.

If you are someone who enjoys thinking on their feet, can analyze large amounts of information quickly and making discretionary calls in tight situations, then these trading types are best for you. Day trading and scalping are high-intensity trading types that require a significant commitment of time and effort.

Swing Traders and Position Traders

Swing traders make trades that last a few days or longer based identifying the general medium-term trend of a security’s price.

Position traders take an even longer-term view, and select their positions based on fundamental analysis and the belief that the price will be constrained by the factors that they have identified and will eventually force the price to a point that makes their trade profitable.

Both of these trader types aim to identify the larger price trends taking place and take positions that will make a substantial profit when their price target is met.

If you enjoy deep analysis and can ignore the short-term vagaries of price and market sentiment, then these trading types are your best bet. Swing traders and position traders make calm and cool long-term projections, and then patiently wait for prices to turn their way.

The lower requirement for screen time makes these trading styles ideal for people who do not have the time and energy to monitor trades all day long, which is especially ideal for traders who also have other jobs.

Find the Right Trading Style for You

Only you know yourself well enough to determine which trader type is right for you. Experiment with various trading styles, and you will quickly discover which one feels right.

Going against your natural inclinations is a guaranteed way to lose, so ease yourself into a comfortable and appropriate trading style, and you will be well on your way to trading success.