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Scalper versus Trend Follower

There are many types of Forex traders but the two which are most divergent are the scalper and the trend follower. The trend follower will spend hours, days or even weeks analyzing trends down to the nth degree and when he’s sure that the trend will continue or turn its’ direction, he will execute a trade. On the other hand, a scalper is always in search for an opportunity to take advantage of the small movement in the market.

What kind of people do these trading types represent?

The trend follower is likely to be a perfectionist, he’s going to execute a trade only when everything is right about it. He is likely not to have too much spare time so he depends on technical indicators and price patters to investigate a potential trade. Then, after he executes the trade, he stays away from the chart and waits  for his position either to achieve the take profit point or hit the cut loss level. If he’s done his job right then he won’t trade often, but when he does, he’ll turn a good profit.

The scalper is a different creature entirely. Yes, they’ll look at trends but after a quick scan of long and medium term trends, they’ll turn their interest to short term trends and follow the five and fifteen minute charts. They’ll micro analyze even the minute charts and then they execute the trade based on the ‘sixth sense’. They can set stop losses and take profit points but to a lot of scalpers, this takes time and they’d rather be there to grab a quick profit here and there. At the end of the trading session these profits should accumulate into a good number of dollars.

Being a scalper takes even more discipline than the usual. The temptation is to let trades run is high, especially if they’re doing well, but for scalpers, trades should last seconds or a few minutes then they’re looking for the next opportunity. They study the charts again and determine the size of the trade because usually they trade with a relatively big percentage of their capital at a time.

Scalpers have a keen grasp of the technical indicators just like trend followers but for scalpers, trend spotting comes in second, recognizing price behavior is their priority.

Both can be successful traders. Novice and advanced traders tend to be trend followers, then some of them progress to be scalpers.

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About Razi Hammoudeh

Razi’s professional experience was gained over the course of more than a decade working with leading Forex market makers in the Middle East, Asia and Europe where he learned about trading, financial instruments and global markets. Being exposed to the wide range of skills he acquired along the years, he continued to develop his trading strategies and further improving his track record in Forex trading. He used innovative business development strategies to find FXLORDS, helping it to rapidly become a major provider of education and trading tools to the successful trader. He is an enthusiastic individual, motivated by challenge and renowned for pushing the limits, always looking to gain some more experience and help as much as possible along the way.

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