When trading in Forex, knowing all the different strategies is of utmost importance, of course. If you want to find the type which will be most effective for you, that is. Here, we want to present the most significant of these. You will see that each of these strategies balances technical and fundamental analysis to different degrees.
Scalping
This is the fastest type you could possibly come across. Every second count here. People often trade over the course of a few minutes, in this strategy. This means looking at the charts constantly for price fluctuations, so pure technical analysis. You cannot wait overnight on your trades, as this could mean massive changes you would not know of.
By doing this, traders ensure minimal risk on most of their trades. Each of their trades are small, but the profits made add up due to the sheer number of them.
Day trading
Quite similar to scalping, except with some breathers. There is still a heavy reliance on technical analysis, though. Traders complete all their traders within a single day. It allows for some reasonable profit per trade, but the risks are not much higher overall. Therefore, it’s a more attractive option to most people.
Swing trading
These types of trades usually take place over the course of several days or weeks. Traders buy when the price may have strayed from the standard, and trade with a significant “swing” in one direction. This needs some help with fundamental analysis as well. Therefore, keeping an eye on the news can be quite important as well.
Position trading
This type is reliant almost completely on fundamental analysis. Here, traders find currencies they think will perform well in the long run. This means looking at the underlying factors affecting a currency. The risks are also higher, which means traders will need more cash to soften any short-term blows. It is not about making a quick buck, so any temporary drops in values are permissible.
