The source of the following content: Wechat public number Hui classroom
When we refer to trading strategies, experienced people match their own trading style.
A trading strategy that does not mention trading style is easy to overturn. Trading style is the first thing we should decide upon entering a trade.
Just like scalping and swing trading, the trading principles are completely different. Using the same trading strategy, it is likely that one will make a good profit and the other will suffer a bad loss.
Today we will talk about the trading style, how to find the style that suits you?
If you don't already know what your forex trading style is, you probably haven't spent enough time exploring different trading styles. This is a very important part of forex trading. After you start trading, you must first find the trading method that suits you, and then match and improve the trading strategy to achieve your investment goals.
Trading style is how you trade, specifically how fast you trade. Unlike a trading style, a trading strategy refers to the conditions and rules upon which a trade depends.
Long-term and short-term transactions
The specific trading styles are mainly divided into two categories: long-term trading and short-term trading.
Long-term trading is further divided into swing trading and position trading.
Swing trading is a medium-to-large trade that typically holds positions for days or weeks. Although this style of trading requires an additional overnight fee, for most traders, trading less is the best way to trade, so swing trading is a wise choice. What needs to be specially reminded is that because the swing trading positions are held for a long time, the acceptable risk range should be calculated.
Position trading holds positions longer than swing trading, and can last for months or even years. Similar to the feeling of value investing, this type of trader only cares about huge market fluctuations and does not need to pay too much attention to the market. They believe that in the long run, the market will rise.
Short-term trading is further divided into intraday trading and scalping.
Day trading is all about opening multiple positions in one day and closing all trades before the end of the day. It takes more time and effort, and more risk. But this trading method is widely welcomed by traders, because they pursue compound interest, and they can earn more by researching good strategies.
Scalping is more frequent than day trading, and you may make dozens to hundreds of trades in a day. It means more energy is spent, and if done well, it can bring huge returns, and if it is done poorly, it will suffer miserably.
How to choose the one that suits you?
Which is better, long-term trading or short-term trading? There is no good or bad, see which is more suitable for you. Generally, when you first start trading, you will try short-term trading. When you feel uncomfortable, you can change the way.
If your trading time is limited, it is better to choose long-term. Long-term trading requires more capital because the positions take up more capital, and if you're always worried about what might go wrong with your trades, this might not be the approach for you. Trading long-term sometimes requires forgetting to trade.
Short-term trading can make profits faster, so if you are impatient and want to use less capital and have more time to trade, you can choose this method.
Short-term trading is more complex and dramatic than long-term trading. Therefore, greater pressure capacity is required. We can't say which method is more profitable, and complexity will definitely make money. For ordinary people, simplicity can reduce mistakes! The best way to trade is to protect your assets and bring more profits!
You are encouraged to try, because it is difficult to empathize with these summed up experiences alone. Maybe a trading style you don't like can actually make you more profitable.
You can adjust your trading method according to market volatility. When the market fluctuates greatly, choose short-term trading, and when the market fluctuates less, use long-term trading to accumulate wealth.
When choosing a trading method, if you study trading psychology, you can make a choice faster. It is manifested in your patience and tolerance for stress when trading.
During the selection period, you can record all the transaction results in the transaction log, and then track and analyze them. If you find that a style is not suitable for you, you can change it without insisting.
But we must pay attention not to think that you are not suitable for a certain style just because you have lost several transactions, because it may be a problem with your trading strategy. Constantly changing trading methods will increase your losses, and it will take at least a month to experiment.
The above is today’s sharing. For the 4 common types of trading styles, you can try them all and record your own trading results. Combined with the above summary, you can make a choice. After confirming, remember not to change styles frequently.
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