“Don’t worry about what the markets are going to do, worry about what you are going to do in response to the markets.”

Trading is the process of buying and selling an instrument with the objective of making a profit. A trader aims to buy assets at a lower price and sell them at a higher price, or vice versa, in order to generate profits.

Traders can buy and sell different financial instruments. And I am sure you’ve heard of the main one:

• Stocks: Shares of ownership in publicly traded companies.
• Bonds: Debt instruments issued by governments or corporations to raise capital.
• Commodities: Physical goods such as gold, oil, wheat, or natural gas.
• Derivatives: Financial contracts whose value is derived from an underlying asset, such as options or futures.
• Crypto: Digital asset that uses cryptography as its main security measure to control the creation of additional units and verify transactions on its decentralized network.

Furthermore, I like to classify traders into three distinct categories:

Scalper:

Those types of traders try to profit from making a lot of trade to capture tiny price movements.

They typically hold positions for seconds to minutes and focus on a highly liquid market.

Usually, a scalper will focus on one pair trade he loves and master his craft.

Day Trader:

A day trader engages in short-term trading with the intention of profiting from intraday price movements.

Unlike long-term investors who hold positions for extended periods, day traders aim to capitalize on short-term market fluctuations and typically close out all their positions by the end of the trading day.

The problem with those two approaches: