Top 4 Styles of Foreign Exchange Trading
Most people invest their money or trade in order to build their wealth high. Foreign exchange market, the largest financial trading market, is that platform where you can trade money to grow it. This market is extremely liquid and highly volatile. Everyday almost 5 trillion dollar currency is traded in this market. If you are new to the foreign exchange trading and don’t have any idea about the style of trading, then you should read the article below to know different styles of foreign exchange trading. This is how the forex trade market works.

1.      Position Trading:
The very first style of trading is position trading. In this type of trading, traders can spend a period of months to years to execute a trade. Position trading has the longest time frame. Position traders can use both fundamental and technical analysis to trade successfully. Since this style of trading is a long term trading, short term price fluctuations are ignored. As a position trader, you can follow both short term and long term trading strategies.
2.      Swing Trading:
In swing trading, the positions are held for a period of days or weeks to capture the short term market moves. In order to decide on the profitable entry and exit point, swing traders mainly rely on technical analysis and price action. Fundamental analysis is not required in this style of trading. Traders are exited if the predetermined profit target is achieved or if the set amount of time is elapsed. If you want to trade swing, you don’t need to monitor the trade continuously, since this type of trading takes several days or weeks to be accomplished.

3.      Day Trading:
In terms of day trading, the trade is completed within a single day. So, you don’t need to hold the position overnight like position trading or swing trading. This style of trading is automatically closed once stop-loss or profit target is achieved. Like swing trading, day traders only use technical analysis to search and exploit intraday price fluctuations and view intraday price charts. As the traders can hold their positions for a period of minutes to hours, large price movements are usually uncommon.

4.      Scalp Trading:
Scalp trading is an extremely active form of day trading, in which the traders involve in frequent buying and selling throughout the trading session. Scalp traders target the smallest intraday price movements, and they rely on smaller and frequent gains highly in order to get profit. Positions in this style are typically held for a period of seconds to minutes. The trade is stopped when the profit targets are reached.

The above are the top five styles of forex trading. Now find the one style that is the most suitable for you, and start your trading now. But before beginning a trade, make sure that you have done enough research on that particular style of trading.


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