Forex trading is not something that can be mastered overnight. In fact, it requires a lot of training, practice, experience, and discipline. Following the trends in Forex trading is a condition of transforming it into a profitable activity. Without proper information, people won’t be able to take advantage of profitable trades this year. The tips included in this short article should help any Forex trader, no matter whether they are beginners or experts in the field. By following the word of advice described below, Forex traders can rapidly become wiser and end up performing better trades. Here’s what you should know about Forex trading in 2019:
It’s all about your trading style
After choosing a clear goal for your trading efforts, it’s time to select a trading style and stick to it for a while. Switching from one style to another is not the best practice because you won’t get proficient in any of them. Being consistent with one style only and learning its intricacies will help you in the long run. By gaining experience in a Forex trading style, you will find it much easier to handle future positions on the market. It’s important to state that every Forex trading style comes with a different level of risk.
According to this risk profile, the Forex trader is supposed to figure out what attitude to manifest and what choices to make in order to trade successfully in the end. An open position on the Forex trading market can be tricky for beginner traders. This is why day trading is recommended for those who want to steadily earn money without putting themselves at high risk. Conversely, traders who have enough experience in handling the Forex market and enough resources to invest in high-risk operations can opt for position trading.
Choosing a style is often not enough for constant success. Forex traders who already learned the basic styles should turn their faces towards figuring out what methodologies to pick. Methodologies and consistency are the keys for efficacious Forex trading. Decisions are never made recklessly in Forex trading, even though it may seem so at times. Experienced Forex traders make decisions based on methodologies for entering and exiting trades. Most traders look for aspects related to the economy of a country, the best moment to execute a trade and so on.
Position trading is the most common approach among Forex traders. This methodology involves holding trades that range from a few weeks to a few months. Position traders usually rely on close analysis of trading elements such as NFP and retail sales. They try to gather as much data as possible about the trades to figure out when it’s the best time to exit the market. The pros of position trading are numerous. The trading operations are reduced because of the long-term development of the trades; the short-term price fluctuations don’t affect the final profit and there is a favorable risk to reward ratio to take advantage of.
Swing trading is a strategy that lasts for medium periods of time, from a few days to a few weeks. The timeframes select for exiting the market are the 1- and 4-hour ones. Swing traders rely on making one single move in the market. Their actions often include trading breakouts, pullbacks and using the bounce of the moving average. Swing trading can be adopted as a side hustle, as it doesn’t require much time. It offers opportunities for making more profit from one year to another. The only disadvantage of this approach is that traders can encounter overnight risks.
Finally, day trading is a common approach in Forex that only last for a few minutes or hours. The approach is similar to swing trading in terms of how it is used, but it happens at a visibly faster pace. The timeframes change to 5- or 15-minutes. Day traders focus on capturing intraday volatility, which refers to finding the most unpredictable session and making money out of it. Day traders usually buy support and sell resistance, while trading breakouts and pullbacks. Day trading means that there is no concern related to how the economy changes long-term. The biggest pro of day trading is that profit is guaranteed, even though it is not as big as in the case of the other approaches. The risk is low because positions close in a few hours. One disadvantage would be that day trading is extremely stressful. The trader must keep an eye on the markets at every moment to figure out when they should close the trade.
Many websites promise that they can teach people how to turn a few hundred dollars into a million in just a couple of months. Of course, this expectation is not realistic and no trader, regardless of their skills, can do such a thing. Forex trading requires time, effort and experience, besides a great knowledge base. To make a living out of Forex, people should give up their full-time jobs and focus entirely on trading. Even so, during the first months, the money earned won’t be enough to pay the rent and bills. In the long run, Forex can become the main source of income, but it takes dedication and a patient attitude.