As a trader, you will choose a strategy according to style. Different traders apply different types of trading approaches. Strategy will help you to reach your goals. Firstly, decide what are the requirements from the market, and in which market you want to trade. Then make a proper plan, and act according to it. Your strategy also depends on your time frame. Traders can choose different types of time frames according to their wishes. Some strategies are discussed here based on the time frame.
Position Trading Approach
This is a longer-term trading approach. You can use fundamental, and technical analysis to do position trading. The time frame is daily or weekly. This is not necessary to sit in front of the computer screen as you have already set your trade for a long time, and also should not be worried about the short-term value fluctuations. In this trading approach, traders cannot do more trade, so their profit is not so high. As a position trader, you need to have proper knowledge about the basics of the market. Set a wide stop-loss. So, you need a larger amount of capital. A deep understanding of the market is necessary for being successful in the Forex market. The trend following approach is also similar to the position trading approach. The only difference is that basic analysis is not used in the trend following approach. This is a totally technical strategy.
Swing Trading Approach
Swing traders try to catch the single move in the market. Their timeframe is for two hours or four hours. They can hold the trades for days or weeks. As a swing trader, you have to know how to buy support, how to trade breakout and pullbacks, and how to trade the bounce of the moving average. So, you need to have an idea about the support and resistance, moving average, and candle stick pattern. If you are a swing trader, do not leave your job. You can make more profits as you can able to do more trades, and also face more risk. To know more about swing trading method, you can visit Rakuten Securities Australia and read the post of the successful traders.
Day Trading approach
This is a short-term trading approach. Here, you can hold your trade for a minute or hour. The time frame is 5 to 15 minutes. You have to grasp the intraday fluctuations. In this approach, do not have to worry about the basics of the economy as this is not necessary. If you are prepared, you can make good profits. As you close your position at the end of the day, you have no overnight risks, but you can miss opportunities. As a consequences, can also face a huge loss. This is very stressful because investors have to observe the market continuously.
Quick Scalping Approach
This is a more short-term strategy than the day trading strategy. Here, the traders hold a trade for a minute or a second. If you are slow, this approach is not for you because you can face a great loss. You need to what is going in the market. People need to get lots of opportunities and can make a good income. Your cost will be high. You have to sit in front of the computer for a long time so you can face lots of pressure.
Lower Time Frame Trading Approach
In this approach, you have to trade in a lower time frame. If you enter on the lower time frame, you can reduce your risks. In this approach, investors have to understand the different types of time frames. Here, they can get huge risk-reward issues. If you have a large amount of capital you will able to make more money.
As a trader, this is your necessity to choose an appropriate time frame for you. If you choose your suitable one, you can apply the strategies. Many traders are not able to select the right one. When people make a selection of their time frame, they need to consider the capital.
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