February 1, 2010
Online Forex Trading - You need to choose a style for trading forex.
Before you choose a trading system, you need to answer a very important question..
and that is what kind of trader are you or would you like to be.
1. Would you like to swing trade - Which means trading on large timeframes with trades lasting
from few hrs to few days?
2. Forex Day trading - This is about trading on smaler time frame like 15 min chart or 30 min chart
with each trade lasting for few minutes to may be 3-4 hrs.
3. Forex Scalping - small quick profits from trades that are only for few minutes.
Before you decide, you need to take various points into consideration.
Let me mention some points -
1. Risk Appetite per forex trade - First and foremost is, How much risk are you willing to take? By this
what I mean is how much are you ready to loose per trade if your trade end in loss?
For example, if you can risk only 25-30 pips per loss, then definitely swing trading is
out of question since a swing trade woulkd require a stop loss of more than 50-55 pips.
In that case perhaps forex day trading and scalping will be more suitable.
2. How many hrs per day can you spend - If you can spend only 1-2 hrs per trade, then definitely forex swing
trading may be more suitable option. For example, trading on a daily chart requires only 15-20 min every day
while day trading on other hand will require about 2-3 hrs in minimum considering you need to watch
charts, open trades, adjust stop loss, close the forex trade etc…All in same day.
But day trading will present you more opportunities in a week than swing trade.
3. Your profit temprament - Do you like profits on a daily basis even though they are small or are you ready to
have profits once or twice a week but those profits are big profits?
Small profits on daily basis are good if you like motivation to trade, as they keep you energized. If so, forex scalping
and forex day trading are more appropriate.
However if you like large profits, then yes, swing trade may be more suitable.
These are just some points..there can be more that you may want to consider.
So, I guess y reading this article, you may have realized that forex trading style requires some thought
and will assist you in secelcting a good forex trading system
5 Comments on Online Forex Trading - You need to choose a style for trading forex. »
February 1, 2010
rose @ 2:36 am:
Hi,
Thank you for the above information. I finally realised what my trading style is. After what you said, I prefer day trade and scalping. I dont mind taking small profits everyday but still cant find a system that can help me to achieve my goal.
Thanks
Rose
Ronald Slyderink @ 4:59 am:
Dear Rahul
Thank you for your emails and good advice. You seem genuinely wanting to help others. On reading your blog writings I am wondering about the three main ways of trading. I personally would only at this stage be able to spend as less time as possible so it looks like scalping and day trading seem best. Now when I look at your products both cost $77 each. How different are these and which would you actually advise? Would one would be better to start with, would both be beneficial or are they slightly different that it wouldn't make much difference? Thank you
Warm regards
Ron
Ronald Slyderink @ 5:02 am:
Dear Rahul
Recently, I obtained your recommended USDBOT robot. I obtained the whole package. How would you use this system? Are you actually using it and how successful are you with it? Much appreciated.
Warm regards
Ron
February 3, 2010
Ken Long @ 12:24 am:
Please seperate trading style from trading time frame. Scalping, day trading, swing trading, trend trading are all associated with time frames, but scalping, swing trading, and trend trading are also trading styles that can be performed on any time frame.
Also, risk is not measured in pips. Risk is measured in dollars. With proper money managment all trades will have the same risk. That is why with such high leverage we can make the same money on a short term day trade as we can on a longer term trade, and we can do it more often. The real difference is the intensity and the time spent in front of the computer.
February 4, 2010
Robert Perritt @ 8:27 pm:
Raul,
Your right on target. This was an excellent article and should be read by all traders. Choosing the right trading style can be the difference in being profitable or not profitable. New traders for sure need to heed your advice here! Style should be the first choice and method the second choice. I think there's a lot of confusion on the two and many traders don't understand the difference.
Robert