A Forex trading style consists of a formalized set of regulations that a trader uses as a criteria for entering and exiting trades. Since every person has their own look, personality, tastes and preferences, a trading style someone chooses usually resonates with these qualities. All of us like different things and are unique in our own way, and this is usually reflected when trading currencies.
It is of essence to note that a Forex trading style tend to develop over time and do not develop at one go. With constant practice and dedication, you can be able to develop a style that is fully-formulated to allow you navigate the scary Forex waters with profit.
Coming up with a trading style that resonates well with their personality can be a daunting task to beginner traders. However, it is an essential aspect of their long term success as professional traders. Two traders cannot have the same style for trading. Even if a group of people were to use the same regulations as criteria for entering and exiting trades, the end results are likely not to be the same.
Generally, there are four main types of trading styles you can choose from. These are scalping, day trading, swing trading, and position trading. Scalping refers to the type of trading in which trades are held for some seconds, or at most some minutes. Since it is a very rapid style of trading, it is best suited for traders with an active personality and can make immediate decisions and act on them without delay. If you are impatient and you are unable to wait for long for your trades to realize profits, then scalping is the best style for you.
Day trading refers to the type of trading in which a position is taken in the market and exited before the end of the current trading day. If you like starting tasks and completing them on the same day, then day trading is the style you should choose. Swing trading is the holding of trades for a few days; therefore, it is not suitable for people who would be nervous holding a trade for such a long time.
Lastly, position trading is the holding of trades anywhere from a few days to several years; therefore, it is the best choice for traders who are very patient and least excitable. The targets for position trading are usually very large, so if you start losing breath once you see a trade going against you by a few pips, then this style does not fit you.