Forex Invest for Success

Forex Trading From Smaller to Bigger Time Frames

In foreign exchange (forex) trading, there are three basic and well-acknowledged strategies. These trading styles are the following: 1) Day traders, 2) Swing Traders and 3) Position Traders.

The trading style is defined based on the time frame set for each trading styles.

DAY TRADERS (1 to 5 or 15- minute time frames) These are the traders that come in and out of the forex market a lot of times in one day. They prefer to have smaller figures of pips but larger figures of lots. A day trader prefers various actions and movements in the forex market.

SWING TRADERS (30-minute up to 4-hour time frames) These are the traders who do forex trading at least a few minutes to a few days after. Usually, swing traders come in and out of the forex market several times a day --- relatively, less visits than a day trader. Movement is enjoyed by a swing trader but always prefers a trend. The basis of trend is a 4-hour time frame and sometimes one-day time frames.

POSITION TRADERS (1-day or more time frames) A position trader is someone who joins in the forex trade for several weeks and sometimes takes months or years. He is someone who analyzes the forex fluctuations to find trends on days, weeks or months.

For several years, it is realized that the long term forex traders earn more money in the longer run. This realization has been backed by a lot of seasoned traders who share the same sentiment. For a forex trader who is just starting out, he prefers to place his forex trades come in and out of the forex market. He is looking for action. The longer time he spends in forex trading is the time he looks out for longer term forex trade and earns more patience. A lot of successful traders will never decide to become position traders but they do shift to a position between being a temporary swift trader and a real position trader.

It is usually a good option for traders to focus more on several stable longer forex term trades than they will on coming in and out of the forex market. It is important that a forex trader should learn how to identify the signals for entry and exit by coming in and out of the market. This is the basic method taught in basic forex. Each forex trader finds it necessary to seek his place in the forex market based on his personality, his time allotment to trade and his trading goals. There are no wrong choices, ways or styles in forex trading. However, lack of understanding about forex trading and several weak executions of forex trading strategies can lead to losses.

As a forex trader, he should determine what kind of trader he is and what his goals are that really motivates him. All traders should study and learn how to do forex trading and how to become patient. The forex market is easy to learn and do if one takes his time to focus in it.