Different Trading Styles Explained
Forex trading is more of a subjective science rather than an objective mathematical problem that needs to be solved. Because of this characteristic of trading,
there are thousands of trading strategies and many styles of trading in the industry. In this article, I will talk about the most common and known trading styles rather than focusing on all the styles out there because clearly that feat cannot be achieved in a single article.
This is a trading style whereby traders trade on the low timeframe charts such as the 1-minute chart and the 5-minute chart. Scalpers trade for short periods of time and close all their positions by day end. This trading style best suits people who can spend the whole day staring at charts and can actively be involved in their trading for many hours a day. It also suits those people who can make decisions quickly and act on their impulses confidently. This is because scalpers can be buying one second and the next they are already selling.
This is a trading style where people hold their trades longer than scalpers but at the end of the day, they close all their positions. The trades may last for hours even up to 15 hours but the key feature is that the trades are closed at the end of every financial day.
This is a trading style where traders hold their positions for an intermediate period. These types of traders hold their positions for 3-5 days and at times even more. It is basically about traders holding their positions for a whole price swing and then exiting when it is exhausted.
This is a trading style where traders hold their positions for extended periods of time. This can be for many months or even years at times. This type of trading is mainly done by big institutions and a few individuals with large sums of equity. This type of trading is difficult for those who are still starting because of its nature where you still have to let trades run even if they are a couple of hundreds of pips up.
The Best Style
There is no such thing as the best trading style since each has its own pros and cons. It is key to know though that each requires a set of traits from the user in question. It is very necessary for every trader to assess themselves and see which trading style best suits them