Forex Trading Types
As you probably already know, there are many types of forex trading you can choose between. Depending on how much time and patience you have, not all kinds of trades may suit you equally well. Allow us to show you what you can expect when you enter the market. In this Forex Trading Types article, we decided to make a list of trader’s profiles based on the preferred time frame since time is one of the most important elements in any kind of trading. Keep reading and see what suits you best!
Forex Trading Types | Scalping
The first type of forex trading types we’re going to discuss is called scalping. Scalping is the most dynamic method of trading forex. Also, it’s the method that creates the highest level of stress. These types of trades usually last for a few seconds or for a few minutes at best and your goal here is to take very small amount of pips as many times as possible, so you should be doing this during the busiest time of the day. In other words, you should trade scalping between 2:00 am to 4:00 am and from 8:00 am to 12:00 noon Eastern Time (EST) because that’s when market liquidity is at its highest. However, since this is very fast and dynamic type of trading, it requires a lot of concentration. You’re a great candidate for scalping if you like excitement in trading, if you can think fast and if you can remain focused on your Forex Chart Indicators for a couple of hours.
Forex Trading Types | Day Trading
Day trading also belongs to short-term forex trading types. Unlike scalping, where you’re taking many trades, here you usually choose one trade a day and you close it once that day is up. It’s perfect for those who have enough time to monitor and analyze a trade during the day, and there are many subtypes of day trading. For example, there’s trend trading where you try to determine an overall trend in a longer time frame. Countertrend trading, on the other hand, is actually looking for trades in the opposite direction. We should also mention breakout trading where one tries to catch a breakout in any direction. But what about slower forex trading types? We have those too, so stay with us!
Forex Trading Types | Swing Trading
The ‘slowest’ trading type to be analyzed here in our article is the so-called swing trading. It’s a longer term trading style where you usually hold your positions for several days at a time. Forex technical analysis is the key here because you have to analyze the charts containing data for several days to make your prediction. You are looking for a move that is bigger than what can happen on a daily basis. If you can’t monitor your trades during the day and if you can stay calm when trades move against you, this might be just the type for you!
Forex Trading Types | Conclusion
As you can see, there are many different forex trading types you can choose between. You should first consider each and every aspect (such as time frames, trading dynamics, and the amount of stress) before making your choice. In an industry such as forex trading, there’s something for absolutely everyone. Carefully analyze your options because making the right decision can set you on a direct path to profit.