… FOREX FAQS A lot of persons, especially the newbies, ask me every now and again to advise on the best trading strategy. My typical response is this: “there is no best strategy.” There are a number of forex trading strategies out there. The secret is to take a look at them, try your hands at then, and then decide which of them works best for you and aligns with your trading personality. Let us, together, take a look at some of the most popular Forex trading strategies. 1. Day Trading Day trading is perhaps the most well-known active trading style. It’s often considered a pseudonym for active trading itself. Day trading, as its name implies, is the method of buying and selling securities within the same day. Positions are closed out within the same day they are taken, and no position is held overnight. Traditionally, day trading is done by professional traders, such as specialists or market makers. However, electronic trading has opened up this practice to novice traders. Active trading is a popular strategy for those trying to beat the market average. 2. Position Trading Some actually consider position trading to be a buy-and-hold strategy and not active trading. However, position trading, when done by an advanced trader, can be a form of active trading. Position trading uses longer term charts – anywhere from daily to monthly – in combination with other methods to determine the trend of the current market direction. This type of trade may last for several days to several weeks and sometimes longer, depending on the trend. Trend traders look for successive higher highs or lower highs to determine the trend of a security. By jumping on and riding the “wave,” trend traders aim to benefit from both the up and downside of market movements. Trend traders look to determine the direction of the market, but they do not try to forecast any price levels. Typically, trend traders jump on the trend after it has established itself, and when the trend breaks, they usually exit the position. This means that in periods of high market volatility, trend trading is more difficult and its positions are generally reduced. 3. Swing Trading When a trend breaks, swing traders typically get in the game. At the end of a trend, there is usually some price volatility as the new trend tries to establish itself. Swing traders buy or sell as that price volatility sets in. Swing trades are usually held for more than a day but for a shorter time than trend trades. Swing traders often create a set of trading rules based on technical or fundamental analysis. These trading rules or algorithms are designed to identify when to buy and sell a security. While a swing-trading algorithm does not have to be exact and predict the peak or valley of a price move, it does need a market that moves in one direction or another. A range-bound or sideways market is a risk for swing traders. 4. Scalping Scalping is one of the quickest strategies employed by active traders. Essentially, it entails identifying and exploiting bid-ask spreads that are a little wider or narrower than normal due to temporary imbalances in supply and demand. A scalper does not attempt to exploit large moves or transact high volumes. Rather, they seek to capitalize on small moves that occur frequently, with measured transaction volumes. Since the level of profit per trade is small, scalpers look for relatively liquid markets to increase the frequency of their trades. Unlike swing traders, scalpers prefer quiet markets that aren’t prone to sudden price movements. Like I said at the beginning, so I say again: the choice of strategy is up to the individual trader. Which of them fits your personality? Which of them aligns with your trading plana and your trading schedule? Try your hands on them, them make that decision. To a profitable trading day… From all of us at Panzy Pips Forex Academy Clement, Fx-Kalapanzy About the Author Fx-Kalapanzy, as he is fondly called, is a senior market analyst and Head of Trainings at Panzy Pips Forex Academy. He is a seasoned forex trader with over a decade of first hand experience on the trading floor of the Financial Markets. About Panzy Pips Panzy Pips is a brand that represents everything about trading and learning to trade the financial markets. Located in the serene clime of Uyo, Akwa Ibom State’s capital city, Panzy Pips is home to the best of forex traders and analysts. At Panzy Pips, we also have a learn and earn programme which allows our students to make profit from the forex markets from the very first day they set foot on their journey on forex education curve. You can find us at Suite 1, Right Wing, 1st Floor, White House; 23, Obio Imo Street, Uyo, Akwa Ibom State.