We all know that Forex is created for buying and selling currencies and there is no mystery in it, given that Forex is one of the most transparent markets in the world.
However, investors can choose different ways to trade on Forex. We present you a brief description of the 4 most popular approaches.
1 – Day Trading (Dei-Trading)
There is almost no chance that you have not heard about it. Daily trading is the most common approach in Forex.
As the name suggests, the meaning is active daily trading. You need to spend several hours a day (if not the whole day) to trade.
Daily trading has gained popularity due to the fact that investors have found that opening and closing deals within one day reduces stress levels and exposes less to risks. Thanks to digital platforms and applications, this approach is accessible to all.
2 – Trading on fluctuations (swing trading)
Volatility is the best friend of this type of trader. They are valid during periods of high volatility, especially at times when market trends are about to end and change to others.
They rely mainly on technical analysis to determine that the trend is going to change and to understand that the time is right for entering or exiting certain positions.
3 – Position Trading
This type of approach is based on tradition. Bought and hold. Although, on Forex, the option “buy or sell and hold” is possible. And although this approach is considered a passive trading strategy, it can be turned into an active strategy if operations are performed on a daily or weekly basis.
This option is suitable for those who want to benefit in the medium or long term. In most cases, the point is to take advantage of a strong trend when it rises or falls.
4 – Scalping
Scalping is just the opposite of the previous approach. This is one of the fastest approaches to trading, very, very dynamic. The goal is to benefit from the difference in spread between the purchase price and the sale price. Scalping implies short interactions over short periods of time and usually a small amount of trading.