TraderMaker

This article simply defines some of the currency trading methods that we come across everyday in our journey as traders. They particularly define how different investors tend to approach the market;

Day Trading

Day trading is a currency trading method that entails the opening and closing of trade positions the same trading day (before 5.pm NY time). A day trader is a term that’s used in referring to those who day trade. The objective of a day is such that he can make 20-100pips. For those who have been into day trading, they would testify to the fact that the best day trading opportunities are found during the Euro and US sessions. Setups for day trading are basically found via intraday charts with small length timeframes like 15, 30, 60 and 240 minutes. A lot of times we know that most currency traders who employ day trading are technically incline. This means that they apply technical analysis techniques like price patterns, indicators, support &resistance, etc to take up trade positions.

Swing Trading

Swing trading shares a lot of similarities with day trading, but the major difference lays in the length of holding positions that are live in the market. It is evident that swing traders will hang on to their open position(s) between 2-5 days. Their profit target is usually high with minimal 100-200 profit potentials. Setting up trades that conform to swing trading conditions are found via daily charts. It is wise to say here that swing traders also are technical currency traders, as they make use of technical tools in determining entry and exit conditions from the market.

Scalping

When traders develop a style of trading that does not allow them stay in the market for long and at the same time is designed to capitalize on small price actions in making profits. It deals with rapid and repeated buying and selling of currency pairs, with a paramount idea that hinges on taking nothing more than 4-15 pips for any trade executed. The most suitable scalping opportunities are seen when the forex market is very active (between Euro open and Euro close) or when we have fundamental news of high impact. Scalping can be setup by using charts in smaller intraday timeframes like 1,5, and 15 minutes. There’s so much market research that’s required for anyone who wishes to scalp. The truth is that newbie traders should as a rule stay away from this trading technique for at least a year after their live trading. Another problem that exist here is that not every broker out there accepts scalping, it is thus wise to always check up with your broker on this.

Position Trading

Position trading is similar to swing trading, but a bit different in that position traders would have a longer time period than swing traders when holding a position. We see traders who use this currency trading method hold open position(s) for 5-50 days in search of 300-1000 pips.

Long – Term

Long term traders are those investor(s) that can afford to hold positions for months or even years. They use both fundamental and technical analysis