Types of Bitcoin Traders

There are different types of Bitcoin traders and each type of Bitcoin trader is determined by the time which they hold their open trades and the lot sizes that they trade.

The most common trading types are:

1. Scalpers
2. Day Traders
3. Swing Traders
4. Position Traders

Scalpers

This is one of the more popular methods of trading Bitcoin, traders will open and hold their trades for a few minutes only and profit from only a few points movement. Traders will use the one minute charts to determine the current market trend and open trades using this one minute Bitcoin chart.

Scalpers will aim to make a profit of between 50,000 and 100,000 points per trade. 1,000 points is equal to $1 dollar change in the Bitcoin price, therefore this profit target is a $50 to $100 change in price.

Scalpers will also open many contracts at the same time so that they can make more profit per each trade. A trader for example may choose to open 10 bitcoin contracts so that the profit target of $50 to $100 will now be calculated using 10 contracts and therefore these traders will make $500 to $1,000 from each trade, because they will have opened multiple contracts at once in our example the trader will have opened 10 bitcoin contracts.

Day Traders

These day traders will open and close trades during the same day and will not hold overnight bitcoin trade positions. Day traders will use the 5 minutes or 15 minutes charts to determine the trend direction of Bitcoin prices and open trades using these chart time frames. The day traders will hold their trades open for a few hours and try to make profits from the intraday market trends.

Day traders will aim to make a profit of between 700,000 and 900,000 points per trade. 1,000 points is equal to $1 dollar change in the Bitcoin price, therefore this profit target is a $700 to $900 change in price.

Swing traders

These traders open trades and hold them for a few days so as to make profits from the intra week market trend that lasts for two or three days. These traders will sometimes leave their open trades overnight so as to catch more profit from the intra week trend.

These traders will use the 1 hour Bitcoin trading charts to determine the trend of the bitcoin market price and place trades using this 1 hour chart time frame.

Swing traders will aim to make a profit of between 1,000,000 and 5,000,000 points per trade. 1,000 points is equal to $1 dollar change in the Bitcoin price, therefore this profit target is a $1,000 to $5,000 change in price.

Position Traders

These traders will hold their trades open for a few weeks to a few months and they will place bitcoin trades that aim to make profits from the medium term and long term trend of the Bitcoin prices.

Position traders will use the Daily and Weekly charts to determine the market price trend and place trades using these daily and weekly Bitcoin price charts. Position traders will aim to make a profit of between 20,000,000 and 50,000,000 points per trade. 1,000 points is equal to $1 dollar change in the Bitcoin price, therefore this profit target is a $20,000 to $50,000 change in price.

About Day Trading Method

The most popular method of trading Bitcoins is the day trading method, most Bitcoin traders prefer to day trade Bitcoin and open and close their trades within the trading day. These traders will hold their trades open for only a few hours. This way a trader will aim to make profits of between 100,000 and 300,000 points which is the average daily movement of Bitcoin prices. This is about an average of $100 to $300 profits everyday. At the same time a bitcoin trader can close their trades quickly in case the market trend moves against their trade direction.

1,000 point movement is equal to a one dollar change in the price of Bitcoin equivalent to 1 Bitcoin contract. For example if Bitcoin moves from $5840 to $5841, denoted as $5840.000 and $5841.000 - this will represent a 1000 point move in Bitcoin prices equal to $1.

Day Trading Example

The example below shows a 1 hour chart that is used for day trading. The day trader will use this 1 hour chart to open trades. The trend below is upwards therefore a trader would have opened a buy trade. If the trader bought 1 Bitcoin lot at the price of $5465.000 and closed the trade at $5845.000, this would be a $380 change in the price per Bitcoin contract which is equal to a 380,000 points change; this is because the Bitcoin price is quoted using three decimal points.

1 Hour Bitcoin Trading chart

The profit of Bitcoin for every point is $0.001, therefore for this trade is the profit for this trade is $380 from this single trade.

Day traders will only trade using the 1 hour chart and hold their open trades as long as the trend is moving in their direction. Once the trend on the 1 hour chart changes, then traders will close all their open bitcoin trades and wait for another trade setup before opening another bitcoin trade.