Many people who approach the Forex market have experience in other markets, like the stock or commodities markets. They have been active in either buying individual stocks or mutual funds, buying bonds, or trading currencies. So they decide to approach the world's largest and most liquid market: the currencies market.

Great idea!

However, many people don't decide ever decide the bigger question: Am I a trader or an investor?

This is an important question. And the answer is even more important because it will decide how you approach the Forex market and how you respond to the never-ending news and events in the market.

There are many different types of traders and investors. On the trading side, there are day traders and swing traders to name just a few. Traders hold positions from a few seconds to a few days. They focus on technical analysis, charts, and indicators. They quickly take profits and move on to the next trade. Or they quickly cut losses and move on to the next trade. Traders don't get attached to a position, a currency, or even (theoretically) to being right. They just move on to the next potentially profitable trade.

Investors are different. There are also many different types of investors, but they often share many of the same characteristics. They tend to buy and hold a position for months or even years. Investors typically open long (or bullish) positions. They rely on long-term macroeconomic data like interest rate cycles, economic growth cycles, and multinational currency policies. Investors are very attached to a position, a currency, and to being right. And they should be. They devote a large amount of time to a particular position. And they will stick to it through thick and thin.

Investing is comparable to a marriage while trading is a hot date.

Are you a trader or investor? There are signs of traders and investors that can help you to decide which you are.

But the biggest problems occur when an investor is behaving like a trader or when a trader is acting like an investor. Just imagine: you think you are on a hot date, but wind up at the altar. Or you want to get married, but end up having only a hot date!

These types of mixups can lead to tears, stress, and losses!