KISHORE M FOREX PRESENTS FOREX TIPS

shore M forex Presents professional service provider .One question

beginning Forex day traders will face is: What’s your trading style?

Are you a position trader? Or do you consider yourself a scalper?

There are many different types of Forex styles, but in general, they

fall into four basic categories. Traders can consider themselves

scalpers, day traders, swing traders, or position traders.

Each of these styles will help Forex traders reach specific goals, and

each style has a different time commitment. So which one suits your

needs best?

If you’re just beginning in the Foreign Exchange Market, it’s

important to carefully consider the different types of Forex styles. It’s

not to say you can’t always change up your style, but it will help you

direct your focus as you’re just starting out. Here’s a look at the four

most common types of Forex trading styles:

Scalping

Scalping is a high-speed, quick-profit strategy that requires the

trader to open many positions throughout the day with the goal of

“scalping” tiny profits off the top of each trade. For example, scalpers

tend to open about 5 to 15 trades per day. And their goal is to score 5

to 10 pips of profit off of each trade.

This trading style requires a significant investment of time. The

trader must be highly focused on the charts during normal trading

hours, and they must be able to control their emotions in each trade.

Typically, these traders focus on major pairs with huge liquidity, like

EUR/USD, GBP/USD, or USD/JPY. The reason: These pairs have the

lowest spreads. Pairs with larger spreads can significantly cut into

the scalpers’ tiny profit margins.

Scalping is not all great though. One disadvantage of this that during

periods of high volatility, say following a major news announcement,

the markets can respond quickly. And quickly knock out the scalpers

small profits.

Day Trading

Day trading is similar to scalping in that the trader doesn’t keep

positions open overnight. Instead, day traders open 1 or a couple of

different trades throughout the day with the goal of scoring up to 50

pips of profit off of each trade. Some days, the trader may adjust their

pip-profit goals if the trend is strong, and others, they may have to

take smaller profits to avoid bigger losses.

Analysis is the day trader’s most important tool. Day traders combine

fundamental and technical analysis to quickly spot micro- and macro-

trends, and they enter trades based on this analysis. Typically, day

traders aren’t required to spend as much time looking at charts

throughout the day, but they do need to pay enough attention to the

markets to ensure they spot trends and trend reversals as they

happen.

Swing Trading

Swing trading occurs on a longer timeframe compared to day trading.

In the Forex market, currency pairs tend to fall into fairly specific

ranges, between high and low points. Swing traders follow these

trends closely, and when they determine an entry point, they

typically stay in a trade for up to a week, and in some cases, even

longer.

To be a successful swing trader, you must be patient. Sometimes, it

can look like the markets are turning against you, but in many cases,

the trend continues. Swing traders cannot let these slight

fluctuations deter their longer-term goals. Although swing traders

don’t need to stare at the charts throughout the day, it’s important to

stay up-to-day on important market news to avoid large fluctuations

and unexpected volatility.

Position Trading

Position trading is generally employed by portfolio investors. The

reason: Position trading happens over very long periods of time, from

months to years, leaving cash tied up in these trades. That’s not a

luxury many smaller scale investors can take.

Essentially, the position trader thoroughly analyzes current and

expected future market factors to determine long-term trends for

currency pairs. And because of these longer timeframes, this trading

style requires a greater investment of capital to avoid call orders

when fluctuations might turn against you. Kishore M forexPresents

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