Wednesday, 5 June 2019

The Best and Most Popular Forex Trading Strategy

Maca type, the most popular forex trading style complete with advantages and disadvantages of each

How do you choose a style or style of trading that is suitable and comfortable according to yourself ?. This question often arises from traders who have just started the forex business and stock trading.

One of the success factors of a forex trader is choosing the right trading style according to the personality, emotions and abilities of the trader itself (both capital and long-term or short-term analytical skills).

The possibility of one trading style is not always the same as the style of the other traders as well as its success. You could say A trading style is very suitable for a trader, but the trading style does not necessarily produce success if used by other traders.

Actually, to find a suitable trading style is to recognize and know and understand yourself.

For example, people who are patient tend to choose a long-term trading system, while a trader whose level of patience is less will be more appropriate to choose a short-term trading system. The idea is to know yourself.

Well here are some styles / styles / systems / types of trading that are widely used by traders all over the world, in the business of stock trading and forex.

1. Style of forex trading scalping

Scalping is a forex trading style in a short or short period of time. Scalping techniques are easy and scalping techniques are considered profitable.

Scalping is the most widely used or used trading style, because scalping can generate profits quickly. But it must require proper analysis at high speed or short.

This trading style does not target a lot of profit every time you open a position, for example, only take profits as much as 10pips. However, open the position many times so that the profit gained becomes a lot.

Users of scalping trading styles are called scalpers. This technique usually requires traders to spend more time monitoring the chart.

A scalper must focus on looking at the chart when the transaction continues and must be strong in controlling his emotions. Not a few of these techniques cause a lot of losses when the analysis is done misses.

Usually scalping is applied to brokers that provide low spreads, so that every open position with a target of not too many pips can still bring profit. If you don't know the spread can read in the following discussion click => What is spread in forex trading?

Frequent losses using scalping will be experienced when the market is moving high volatility before and after the main forex news. So that the market will respond so quickly, as a result it can make a loss.

The following are the advantages and disadvantages of scalping trading techniques:

Benefits of scalping:
Can generate profits quickly, using scalping can generate large profits in a short time if you know the analysis of price movements quickly and precisely
Limiting risk, using a short trading system also needs to implement a small stop loss as well, so that it can protect funds if it turns out the analysis misses.

Scalping disadvantages:

Requires high accuracy analysis

Because using scalping we must have a high percentage of profit. Because each open position can only bring a small profit, if the stop loss is installed a little, the possibility of cut loss will occur because prices also need space to move.

If you get cut loss often because you put a little stop loss, then the long run time is too long. So you need to learn and practice with high flight hours so that the analysis is more precise.

Scalper must take losses quickly, because the scalper mindset is a big profit in a little pips target, so often open positions with large volumes. If floating loss is left it can be dangerous too.

Losing quickly

scalping aims to generate large profits in a short period of time, of course, this is also a risk of experiencing losses quickly when the direction of price movements against your trading position.

Why is that, because scalper is identical to trading with a large number of lot volumes.

2. Forex Day trading style

Day trader is the style / trading style that is actually similar to scalping because it opens a trading position that has never been more than one night. However, the target profit achieved is greater than scalping.

The difference is that day traders open one or more different trading transactions throughout the day with the aim of obtaining profit targets of up to 50 pips from each transaction.

But there are times when traders take less profit to prevent more losses.

This daily forex / day strategy is able to run very well when the market is in a strong trend.

The importance of forex analysis in using trading styles.Traders will combine fundamental analysis and technical analysis to predict the trend that will occur.

Traders do not need to spend a lot of time paying attention to charts throughout the day. However, they are very concerned about market conditions to ensure seeing trends and changes in direction of the next trend.

Day trading is a trading style that is popular among traders. Daily trading is the process of buying and selling an asset on the same day.

For example, open a position today, and will close today.

Traders who use daily trading are often referred to as day traders. This trading style takes advantage of price fluctuations that take place when daily events take place.

The range is usually between a few minutes to several hours per trading transaction.

Through a good analysis system, day traders do not have to be fixated or monitor the chart screen. Because we can utilize the automatic features on the platform chart (including: installing stop loss and take profit).

Usually the trading period is around 2-4 hours or when it reaches the profit target. Usually the profit target is not greater than 100 pips, generally around 30-50 pips.

Because the profit target is not too large, day traders can open more than one position in a day.

Day trading usually uses 4H or 1H time frames as a reference for long-term trend direction analysis. And for trading execution, use a 15M time frame. Because the time frame and trading time are short, the profit target is also not large.

Following are the advantages and disadvantages of daily trading style / day trading:

Advantages of day trading:

The strategy of trading with day trading, has many opportunities that can be taken. It is necessary to know that the profit target pursued is not more than 100 pips / points. And this opportunity can appear in various currency pairs.

Even though prices are on a rising or falling trend, a day trader is usually able to benefit from it.

Daily trading users don't think too much about long-term trends like swing trading style users. For day traders trading today, there is no need to think about moving the next day.

Lack of day trading:

A daily trading user is required to be able and able to monitor price movements several times each day. If it is not possible, day traders will lose the opportunity to open positions.

Which will affect the pressure / pressure psychologically of a trader. Imagine day traders must be able to deal with price changes every second.
The more a trader makes an open position the greater the risk that must be faced.

Also Read : Simple but effective way to trade Forex

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