Trade Styles That Often Works in Forex Market (Module 8)

We've done discussing the types of forex analysis (module 6), and the fundamental trading strategies (module 7) there often work in the forex market. In this post, we are to discuss the various types of forex styles and their importance in forex trading.

It may sound pointless to have a style within forex trading. However, trading style often comes handy when combined with an effective strategy. A well-formed strategy might not be suitable for a certain style and may result in unprofitable trade. That makes the trading style important to bring out the kind of trader you are.

Another point is, every trader has his/her own method on how to attain his/her goal. Success is likely when you understand your mindset and style as a trader.

Trading Styles Fundamentally, styles distinguished by the length of time a trader aims to take part in the trade. Let's discuss each.

Day Trading

A day trade is appropriate for traders who like to start and complete a task within the same day. If you start building a bookshelf around 7 in the morning, you won't go to bed until that bookshelf is complete, even if it means you are to build until 5 am the next day. That means, day traders don't like to hold on to their day trades overnight.

When it comes to trading, day trading style means to trade currency pair that enter and exit on the same day. Returns come by means of leveraging higher amounts of capital and taking advantage of high liquidity pair while it makes a few price movements. As a result, at the end of the day, trades are done with either a notable profit or loss./

Day trading is a short-term process. It requires a trader to give time analyzing the markets and monitoring trades. Meaning, it requires a trader to spend more time in front of a screen. That was the reason why day trading is considered to be the most demanding style among others.

Swing Trading

Swing trade is preferable for patient traders that can keep their trades open on several days. If you don't have much time to monitor your trades, swing trading suits you. However, it still requires time in following and analyzing the market each day.

Swing trade won't work well for a nervous trader that can't hold a trade away from sight. Basically, this style requires a larger stop loss compared to day trading. A trader should have the ability to stay still and calm whenever a trade is going against the plan.

Ideally, swing trading means betting your hope to hold on a big movement. Swing trading timeframe enters on a daily chart, then holding a position for days or weeks.

Swing trade is appropriate for those who have a day job while doing forex trade as a part-time.

Position Trading

Position trading is considered to be the longest term among others. This style often has trades that last for years. That means this is the style appropriate for most patient traders. This style also requires a trader to have a good knowledge of the fundamental analysis.

As position trading holds long timeframe positions, stop loss needs to be at large. The trader needs a well-capitalized account.

A position trader also needs an ability to ignore the current popular opinion within the market. The trades are likely to go against his/her plan at some point, and both need to hold through both bear and bull markets.

Scalping

If the first three styles are boring for you, scalping may suit you. Scalping is a fast-paced, hit-and-run, and exciting style that will keep you fired up on the edge of your seat.

Ideally, scalping trade means holding a trade for a few seconds to a few minutes and at the most. The goal is to gain a bit amounts of pips as many times available throughout the busiest time of the day. That simply means the trader is to stick on to the screen like there's no tomorrow. If you're a devoted trader with that much time to spend in trade, scalping is appropriate for you.

On the contrary, if you are easily distracted and mostly find yourself expecting the market to go with your plan, you should take out scalping from your style choices. To succeed with scalping, a trader needs the ability to monitor and analyze charts.

Scalping uses higher leverage. It needs an effective risk management strategy. This style does not mean you'll have big wins all the time. Scalping is for traders taking small profit more than the course of time in order to make a great overall profit.

The ideal time for a scalper is during the overlap sessions, from 2:00 am to 4:00 am and from 8:00 am to 12:00 pm EST.

Your Trading Style

You should watch out for a trading style that conflicts your ability and strategy. It somehow requires consistency to stick on the style that brings out the best of you as a trader

The trading style you should choose needs to go along with your market knowledge, skills, and personality. You can start discovering the right style for you by opening an account now. Once you found out the right style for you, be comfortable with it and stick with it. Utilize a few strategies for your long-term profit.

That ends our discussion on how to use and apply trendline analysis in the market charts.

   

_____________________________________________________

Be instantly updated with the trending trade market and master the world of trading efficiently. Just submit your online correspondence and get the latest updates that you need!

_____________________________________________________

   

© 2018 Profitixpedia. All rights reserved.