Who can trade Forex, and what makes a great Forex trader? Everyone wonders if they have what it takes to be successful in the Forex world; in this article, we show you who can trade Forex, the different trading styles you can choose from, and the qualities that suit you to become an exceptional trader in Forex. Forex market.
Forex trading used to only be available to a select group of large banks and institutions and fortunately for us in the late 1990s, the advent of the Internet allowed online Forex brokers to offer trading accounts to ordinary people who wanted to speculate on changes in exchange rates. Today is all you need to start your Forex trading journey. All you need is access to the Internet, some initial capital, and an account with a reputable Forex broker.
It sounds easy, but Forex trading is not for everyone. To understand what makes a good Forex trader, you will first need to understand the basics of Forex trading patterns, which we will divide into four categories based on how long the trades last.
Short-term Forex traders
Let’s first take a look at scalpers who hold Forex trades for very short periods, often making multiple trades in one day buying or selling the currency and then just minutes or seconds later closing that trade in the hope of making a profit. To be a successful scalper, You will need to be decisive and comfortable in a fast-paced environment.
These trades also tend to have smaller profit targets in terms of pips or pips than longer-term trades due to their duration and this is obviously because the price does not tend to move very far over very short periods. A typical number of pips or pips can be estimated by looking at the average true range (ATR) for the 1, 2, or 5-minute time frames in the markets where scalping trades are executed.
Since trades tend to be smaller, the goal from a scalping trader’s point of view is to make a lot of trades with a small risk and small reward. This means that during a typical trading day, a scalping trader will be looking to make a fair number of trades.
For this reason, a scalper needs to keep risks low because it is easy to see how quickly you can become emotional when trading frequently over small periods.
Daily Forex trading
Day trading refers to trades that are typically opened and closed within a single day. These trades typically last anywhere from 15 minutes to several hours. These trades are usually analyzed in 30-minute, 1-hour, and 4-hour time frames. Although this is just a guide, These trades may tend to have larger targets than when scalping, as the trader is usually looking to profit from one of the market’s significant moves during that day.
Using the ATR is, again, an excellent way to gauge how significant target moves with this pattern are in the markets you are looking at, and since trades take longer to set up and execute than scalping, the frequency of these trades is lower.
On average, a day trader might take between 2 to 10 trades a week and, therefore, tends to take a little more risk on each trade.
Long-term Forex traders
Next, we have day traders who open and close their trades the same way throughout the day but don’t hold them overnight. Day trading is not as intense as scalping, but you will still need to be a quick thinker. If scalping or day trading doesn’t seem Suitable for you, you may be suitable for holding your trades for more extended periods in spring trading. Traders hold their trades for several days or even weeks. Swing trading requires patience and confidence to stay calm during market fluctuations.
Swing trades can typically last anywhere from a day to several months or even longer in some cases. The analysis of these trades also tends to be on daily, weekly, and monthly time frames, and due to the extended time frame of these trades, the targets tend to be much larger than those targeted by the previous patterns.
Forex trading in positions
Finally, we have Position Trading Position Trading. You can hold your trades for weeks or sometimes even years. To be successful at position trading, you will need patience and the ability to ignore popular opinions to make your own decisions. If you’re not sure which style is right for you, don’t worry. You don’t need to be defined by a trading style, and you can mix and develop your style throughout your Forex journey.
Blueberry Market CEO Dean Hyde adopts a hybrid approach to trading by entering the market through fundamental analysis and exiting using technical analysis. This strategy involves using one-hour charts and fundamental support. It’s important to remember that Forex trading is not a get-rich-quick scheme. Learning the basics, developing your skills, and gaining experience takes time.
