The 3 forex trading styles (Straightforward explanation) is what you are going to learn in this article.
After understanding how to use Japanese candlesticks, I knew that a candlestick represented a duration. When I started to analyze the graphs, I saw that you could associate different time units with candles.
These time units range from one minute per candle to a week or even a month for a single candle. So, what units of time should I choose? Well, it depended on me, I had to choose which way I was going to trade. And for that, I had to choose from one of the 3 forex trading styles.
What are these 3 forex trading styles?
Although we can assign a large range of time units to a candle, we differentiate 3 trading styles based on the length of time that the positions remain open.
- swing trading.
Swing trading is a long-term trading style. The goal is to open a position that will be closed several days or weeks later. For candles, we will prefer the duration of 1 day or 1 week.
Intraday involves opening a few positions during the day that will remain open for a few hours or less. It is a medium-term trading style. For the candles, we will favour durations of 5 minutes to 1 hour.
Scalping involves opening several positions during the day that will remain open for a few seconds. It is a very short term trading style. For the candles, we will prefer the durations of 1 or 5 minutes.
Which trading style to choose?
Choosing your trading style is up to you. You have to choose a style that suits you and that also suits the time you want to devote to trading. If your goal is to make ends meet, trading a little after work, swing trading can be a good way.
If on the other hand, you want to spend your time behind the screen and open a maximum of positions, scalping is perhaps more indicated. The choice also depends on your personality. Do not hesitate to test the different styles to find the one that suits you. Once you have decided on the unit of time for a candlestick, you will be able to learn how to read a stock chart to know when to invest and for how long.
Take a little time to find out what trading style you want to do and configure your charts accordingly. You can then go to the next step: technical analysis.
I invite you to ask me your questions in the comments. I will answer it with great pleasure.
Thank you for reading this article!