Day, Swing or Term trader, which one are you?
One of the most important things to understand, particularly when investors talk to each other, is the “Time frame” that they are trading within.
It’s possible for both long and short positions to make money at the same time, in the same Instrument, depending on the time frame each investor is trading.
Confused? Read on.
Take a look at the GBP/USD Chart below, spreads have been omitted for the sake of simplicity.
Investor 2 is a “swing/term trader” he invests and holds positions over a number of days or longer.
In approximately a 3 day period he has gained 106 PIPs in this investment in a single short position.
Investor 1 is a “day trader” he invests, opens and closes multiple positions on a daily basis. He also trades “retracements” against the longer term trend.
Over the same time period, trading 8 day trades (in the opposite direction, Long) he has also gained 252 PIPs.
The point is, both investors are making returns on their Investments over the same time period but, trading in different timescales and in opposite directions.
Make sure you are on the same page, when discussing your investment strategies with other investors.
There are many ways to increase your gains and protect yourself when investing. Keep following our blog to give you the edge over other investors. Trading takes time, patience and discipline.