Trader Types Based on Transaction Behavior

Buying and selling transactions are crucial activities in forex trading. The motivation of a trader to make a transaction varies from one trader to another. Below are the different categories of traders based on their different transaction decisions.

Fundamental Traders

Fundamental traders are traders who use fundamental analysis as their method of analysis and do not see the technical analysis side at all. This trader will focus his attention on various economic data or news in his decision making. Traders will see news related to a particular currency before making a transaction. Apart from economic and political events, usually this type of trader also observes import-export transactions between countries because this will affect the strengthening or weakening of the exchange rate of one country's currency against other countries' currencies.

Basically fundamental analysis is more suitable for long-term trading. Indeed, there are some economic data that can be used for short-term trading, but they are only incidental, for example the effect of interest rate decisions from the central bank. If some trading methods are based on a brief analysis, fundamental analysis may not change for days or even months. Maybe in a matter of years. So don't be surprised if there are fundamental traders who can hold a trader's position for days, months, or maybe even years.

Fundamental traders usually play for the long term and large enough capital. Often a trader's decision turns out to be in the opposite direction to the market price in the short term, so the capital he has must be strong to withstand the potential losses he experiences. Traders only enter the market occasionally, but when traders enter the market it is usually with large transactions, so the potential profit is also much greater if prices move according to their estimates. This type of trader turns a blind eye to other analyzes because the trader has very high self-confidence and has watched the market for a long time so that the trader knows the effects of various world economic and political activities. If a trader wants to become a trader of this type, the trader must know for sure when the world's financial news, especially America is issued and immediately take a sell or buy position at the seconds of the delivery of the news.

Technical Trader

Unlike fundamental traders, technical traders do not care about any economic data or news as a basis for making decisions. This type of trader argues that market prices do not move with any number but follow a certain rhythm or pattern, and traders try to follow price movements from time to time and try to find patterns. Traders use technical analysis in conducting the analysis, the data that are generally used are charts of price movements and trading volumes, as well as various derivative indicators.

Technical analysis can also be applied to short-term to long-term trading. However, this type of trader generally prefers to trade short to medium term. This kind of flexibility is lacking in fundamental analysis which is more inclined to long-term trading. In technical analysis, the rule of “market action discounts everything” applies, which can be translated into “price movement behavior reflects market sentiment”. According to them, price movements can provide clues about where the market will move so they no longer need information from economic data or news.

Traders prefer to be busy trying various indicators and combining one indicator with another rather than busy themselves looking at the circulating economic data. If traders still use economic data as a reference in forex trading, traders may not be comfortable with the technical type of trader, because they often take trading positions that are contrary to the predictions of economic data that will be released. One weakness of this type of trader is that they have a very high dependence on computers and the internet so that if the internet connection is interrupted, the trader will never dare to make a decision.

Traders Mix or Sentiment

This type of trader is a combination of fundamental traders and technical traders. Traders try to combine the advantages of each fundamental and technical analysis to identify potential price movements. Traders continue to observe fundamental analysis to determine the direction of price movements, but do not immediately make buying and selling decisions without taking into account the technical analysis, and vice versa. Traders argue that the most appropriate decision is when a decision is supported by two sides of analysis, namely fundamental and technical. If only one of them does not provide the same confirmation, this trader prefers to remain silent and observe the market.

However, when fundamentals are also technically supported, or vice versa, they will immediately look for the best price to take a sell or buy position, for example, when technical analysis states that the market is in an uptrend, sentiment traders will try to find momentum or fundamental reasons. that support the upward price movement. The weakness of this type of trader is that decisions are often taken too long so that they are not infrequently too late to take a position, so the profits they get are not maximized. Of the many types of traders, this type is considered the safest.

Speculator Traders

This type of trader only occasionally observes fundamental and technical analysis. Traders make decisions so quickly that it seems that the decisions taken have no basis and only rely on feelings. To become this type of trader, we must be prepared to lose our money due to defeat. But when it turns out that the decision is correct, it is this type of trader who gets the most profit. This type can be called a gambler. If we want to enter into this type, traders must have a gambler mentality that is always ready to win and ready to lose. Traders should believe in ourselves and not be influenced by any analysis that we come across.

Fickle Trader

This type of trader is a trader who does not have a strong foundation to make a buying and selling decision. They have friends who are very much in the field of forex transactions and are interested in combining various types of analysis to get the best decisions. In doing so, they found themselves confused and unable to make any decisions. If more friends are selling, then they will sell, and if on the contrary, more are buying, the trader will buy too.

More info:

Free soft copy material by contacting 081 258 066 174 Whatsapp/call

Private info / paid premium class (guided forever until get consistent profit and independent). Whatsapp/call 081 258 066 174 / 081 233 593 672 or direct access to our Website www.wijayatrading.com

Be careful with group and parties on behalf of Wijaya Trading, we never accept investments or entrust funds to be managed from investors for any reason. Official contacts number of Wijaya Trading only use the 2 numbers above.