Trading Styles ZT

Traders fall into two types of styles. A Scalper is someone that is risk averse and look to play larger shares for smaller moves in the shortest period of time. Scalpers like fast and powerful moves to capitalize on the momentum of a break. These traders will be utilizing mostly the 1-minute and 3-minute time frames. Even though they still need to be aware of the direction of the 8/13-minute time frames, they will primarily rely on the 1-minute and 3-minute. It is very important that scalpers understand what environment is best suited to their style. Scalpers should only be playing a market with volume, follow through and wide enough channels to score profits. The opening hour will be the best time for a scalper and dead zone will be the worst.

A Range/Swing trader expects a larger move in time and will be patient enough for the move to play out. These traders focus more on the wider time frames heavily relying on the 8/13 and 60-minute charts. They focus on the forest and not the trees. They don’t mind giving up a quarter to make a dollar. Trending markets work best for this style and channels can be tight regardless. The downfall naturally is that wider stops have to be taken into account for bigger gains. Range/swing traders still have to pay attention to the 1/3-minute charts to get good exits on their gains and stops -- this is very important. All exits on longs need to be timed for high bands on the 1/3-minute and low bands on the 1/3-minute for short covering.

It’s possible to adapt to both styles also but this means starting with the style that feels most comfortable first.


(Excerpts from Interview With Jea Yu)