When you start trading you’re overwhelmed by the selection of forex-strategies you might be presented with. There is no way you’ll be able to trade multiple forex strategies at one time and you have to make the choice of which one to trade.
There are a variety of things to contemplate when selecting your forex-strategies. Firstly you have to choose your timeframe and holding period. How long are you going to remain in the trade? You need to decide if you’ll trade intraday or hold trades overnight and are more of a swing or position trader.
Intraday foreign exchange strategies are very popular and with such a foreign exchange technique you’re taking between 10 and 50 pips per trade and your risk profile are similar. If you trade an intraday forex strategy you additionally normally trade between 1 and 10 times per day.
Swing or position traders sometimes trade much less and wait for a larger move in the forex market to take advantage of. They stay in the trade for 1 to five days and look to take one hundred+ pips on a trade. The stop loss on these trades can be a lot larger and thus you need to have the account size to accommodate this bigger stop loss
Usually it’s simpler to swing trade than to intraday trade, and the irony is that most individuals are drawn to day trading because they consider it’s easier to make money when you trade short term. That can also be one of many causes more than 90% of all traders fail – the majority try to trade short term.
A famous trading author once stated that day trading is like flying a fighter jet at very low altitude, one mistake and you crash and burn.
With regards to forex-strategies – it’s the case of finding the one foreign exchange technique which you’re comfortable and successful with
