Finding a trading style that works for you and is right for you as an individual trader is important for trading any market, not just Forex. Success is rarely found in trading by copying 100% what someone else is doing, and not understanding what style of trading is best for you. The reason is that there are many variables that go into a methodology and style of trading, to name a few:

  • How much time do you have in a given day / week / month to trade? And when are you available to trade?

  • How much capital do you have and what do you think of the risk?

  • What is your experience and what kind of approach makes sense to you?

  • What markets do you trade in?

  • What are your goals?

  • Where are you in the world and what are the regulations?

The answers to these questions will be different for most traders, and therefore their style and approach will also need to be different. If you are trading a style that works for someone who has 2 hours a day to trade at the start of each day, and you only have 30 minutes a day at the end of the day, then the approach probably won’t work. not for you. If you are trading a style that works for someone who has over $ 25,000 in their account and you have a lot less than that, then the approach probably won’t work for you. But that doesn’t mean other approaches can’t work for you.

The beauty of trading is that there are so many ways to be profitable. You can combine the variables that work for you in the right way and still find an approach that can work with that. The mistake most forex traders (and traders in general for that matter) make is that they try to adapt to a style they have learned, rather than finding the style that suits them the way they want it. are already.

When we say ‘style’ in trading, we are generally referring to the following:

  • Today’s transactions.

  • Swing Trading.

  • Exchange of positions.

  • Invest.

No style is better than another, no style is “more profitable” than another, they work for different people depending on the lifestyles, capital and personalities of individuals. It can be helpful to have a clear idea of ​​what the different styles of trading can mean:

Different asset classes lend themselves better to certain styles. Forex is the largest asset class in the world by far, which makes it quite diverse and allows us to profit from movements over longer or shorter periods, capitalizing with almost any style. It also offers decent leverage, so it’s easier to trade with smaller accounts which makes short-term trading more efficient (if you’re using a profitable strategy of course!).

However, if you are thinking of forex Day Trading, it is good to keep the following in mind:

  • There will always be a spread, depending on the broker, it can be big or small, and it can change depending on the events in the market.
    This means that if you are using very short time frames, the spread could be something that hurts you because the smallest of moves could be the difference between a win and a loss for you. This is less true when using longer lead times and therefore longer term styles.

  • Billions of dollars flow through the forex markets every day and there are many players – from retail speculators and institutional traders, to governments, businesses and individuals trading in currencies. This means that many buy and sell orders pass through these markets on a daily basis for many different reasons.
    This can make it harder to be right on small movements, and you have less room to go wrong.

  • The forex markets are open 5 days a week, so there is little or no risk of an overnight gap.
    This means that unlike stocks for example, you don’t need to exit by the end of the day, so there is nothing inherent in forex mechanics that means you would need to trade. day by day.

Of course there are some profitable forex traders who do day trading, but in my experience it can be a bit more difficult than if someone were to swing or position the trade, or even invest in the forex markets. .

By evaluating your availability of time, how often you can interact and how rigorously you can be with your time allocation, what your goals are and what you look like as a person, this should guide you towards the style that is the best for you. . Then you will need to adjust your methodology accordingly, whether it is a change in the schedule used, different risk management rules, etc.

Ultimately, the style of trading does not by itself dictate the likelihood of success, but rather how it relates to you as a person and a trader. Finding the style that suits you the best, whatever the style, is the one that is most likely to bring you the success that you want to see in your trading.


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Al Worden

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