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Which are the Forex Trading Styles?
There are many different styles to trade Forex, according to your individual profile and your trading time horizon.
(1) Trading and Technical Analysis
Technical analysis is widely used among Forex traders as a tool to forecast future currency trends and the optimum entry-exit points. Technical analysis involves identifying patterns, determining support and resistance levels and many other issues.
Here are some technical analysis trading styles:
1.1 Trend Trading
Trend traders are Following-The-Trend. That means that you define the master trend of a currency pair and you follow it. Trend trading must always be followed by the corresponding stop-loss orders.
1.2. Range Trading
Range trading involves buying and selling Forex pairs that are fluctuating in a specific range that is formed between the upper level of resistance and the lower level of support.
1.3 Automated Forex Trading
Automated trading is trading using Forex Robots (Expert Advisors). This type of trading is based mainly on technical analysis and doesn’t involve any human involvement.
Scalping is trading style that involves buying and selling Forex currencies aiming tiny profits. Scalping trades last some minutes or even some seconds.
1.5 Swing Trading
Swing trading means buying or selling Forex currencies aiming to profit from swings of the trend. Swing trades can last from 1 hour to a couple of days.
Here are some other Trading Styles..
(2) News Trading
News Trading means buying and selling currencies based on the latest news. The concept behind News-Trading is that news may not automatically be incorporated into Forex exchanges, so news-traders aim to move faster than the market.
(3) Forex Day Trading
Day-trading means buying and selling Forex Currencies intraday. An intraday or day trader opens positions that are closing after some minutes or after some hours.
(4) Forex Carry Trading
Carry trading means buying a Forex currency offering a high interest rate and selling a currency offering a low interest rate. Profits are generated from the daily interest rate differential in a daily basis.
(5) Fundamental Analysis and Trading
Fundamental Analysis Trading means executing trades after analyzing the macroeconomic environment and new developments within an economy. This may involve short-term periods or long-term period. Long-term trading based on fundamentals is called Position Trading.
Forex Trading Styles