What Is Your Trading Style?

In Forex, you will find many different trading styles.

Some people prefer to "always be in the market". They are initiating trades constantly. They place an order, only to close it out minutes later. This is known as "Scalping". They hope to make a big profit by winning lots of little trades throughout the day. They focus on consistently gaining small profits with a large volume of trades.

Others take the exact opposite approach. They are more like the quiet hunter, who sits far off in the distance. They wait for exactly the right moment before they squeeze the trigger. They have a lot of criteria which must be met before they can enter the trade. When everything lines into place, they place a single trade. Then it becomes a waiting game. They might let their trade run for days. These trades are generally highly profitable. The goal is to "catch the train" early by studying the large trend patterns. These types of traders don't place many trades per month, but the trades they do place earn them a lot of pips. This type of trading is called, "Swing Trading".

Of course, you have individuals exactly in-between these two extremes. Then you have traders who do a little bit of everything, depending on the way the markets are moving. They might scalp one currency pair while letting other trades ride for days. There are an infinite number of possibilities.

So what type of trader best describes you?

Do you like the thrill of constantly trading in the market, or would you rather place a select few trades which are based on large movements in the market?

An important thing to consider is maintenance. Scalping requires much more physical presence and maintenance than swing trading. Swing trading also tends to be lower risk. But there are never any guarantees in the market of Forex!

I used to be all about scalping when I first started trading, but now I lean more towards swing trading simply because of convenience. I must admit though - scalping is an incredible rush. There is nothing like making a few hundred dollars in a matter of minutes! Swing trading grants the trader a bit more freedom. It is much more of a "set it and forget it" type style.

If you are just starting out in Forex, demo trade using both types of styles. Experiment and see what yields the best results.