If you begin trading you’re overwhelmed by the selection of forex-strategies you are presented with. There is no way you can trade multiple forex techniques at one time and you have to make the decision of which one to trade.
There are a selection of things to consider when selecting your forex-strategies. Firstly it’s important to choose your timeframe and holding period. How long are you going to remain in the trade? You must decide if you are going to trade intraday or hold trades overnight and are more of a swing or position trader.
Intraday forex strategies are extremely popular and with such a foreign exchange technique you are taking between 10 and 50 pips per trade and your risk profile are similar. If you happen to trade an intraday foreign exchange strategy you also normally trade between 1 and 10 times per day.
Swing or position traders sometimes trade a lot less and wait for a larger move within the forex market to take advantage of. They stay in the trade for 1 to 5 days and look to take 100+ pips on a trade. The stop loss on these trades can be a lot bigger and thus you have to have the account size to accommodate this bigger stop loss
Typically it is easier to swing trade than to intraday trade, and the irony is that most people are drawn to Day Trading because they consider it is easier to earn cash when you trade short term. That can also be one of many reasons greater than ninety% of all traders fail – the bulk attempt to trade short term.
A famous trading author once said that day trading is like flying a fighter jet at very low altitude, one mistake and you crash and burn.
When it comes to forex-strategies – it’s the case of discovering the one forex strategy which you are comfortable and successful with
