Thursday, 5 October 2017

Four Approaches To Forex Trading

Posted by Anonymous at 11:05 Labels: success tips

Forex is about buying and selling currencies. We all understand that. There is no mystery about it, especially as Forex is one of the most transparent market in the world.

However, investors could opt for different ways to trade in the Forex market. Below we give you a brief introduction to the four most popular approaches to Forex trading.

1 - Day Trading

It is almost impossible that you haven’t heard of it. Day trading is nowadays one of the most common approaches in the Forex industry.

As its name defines it, day trading is about trading every day. In other words, it’s an active-trading approach. It means you have to set aside a few hours (if not a full day) to work on your trading.

Day trading gained popularity because investors found opening and closing trades in the same day reduces their stress levels significantly, plus it exposes them to less risk. Thanks to digital platforms and apps, this approach is available to all.

2 - Swing Trading

Swing traders are volatility best friends. They tend to operate in periods of high volatility, especially when market trends are about to be broken and reestablished.

Swing traders would mainly rely on technical analysis to determine when a trend is about to change and understand if it is the right time to enter or exit a certain position.

3 - Position Trading

This approach is all about tradition. Buy and hold. Although in Forex you could either buy or sell and hold. While this is usually seen as a non-active trading strategy, it can also be turn into an active strategy if operations are done on daily / weekly basis.

This type of approach is suitable for those traders looking to make profits in the medium / long term. In most cases, the idea is to take advantage of strong trends, riding the wave up or down.

4 - Scalping

Scalping is a direct opposite to the previous point. It is one of the quickest approaches to trading, very very dynamic. The goal is to monetize price gaps derived from bid/ask spreads. Scalping involves short movements in short periods of time and usually low trading volumes.

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