6. Six Different Forex Trading Styles –
Select your Own Style
These are the six main categories of Forex Traders (Trading Styles):
1. Curry Traders (Long Traders)
WHAT THEY DO?
They open positions lasting from 1 month to 9 months and aim to exploit
inefficiencies’ in the level of interest rates between two economies. They usually like
to buy currencies offering huge interest rates (10-15%) and at the same time sell
currencies offering lower interest rates. This difference can be transformed into huge
profits for those who know how and when to trade it.
REQUIREMENTS:
When you open a position in the Forex Market that remains open more than 1 day
you pay or get paid what is called as the Swap value. Swap charges are calculated
based on the level of interest rates between two currencies. These interest rate
differences can sometimes work for you and some other times against you.
Therefore if you trade long you need a Forex Broker offering the best terms as
concerns the swap charges. Additionally you need a broker offering a wide asset
index. An asset index is the portfolio of currency choices that you will be able to
trade. This asset index varies depending on your broker. The more currency choices
you have the easier it will be for you to exploit interest rate inefficiencies. When you
trade long, you don’t care about the spreads, the technology, delays etc.
It is essential that a long-trader must be able to understand fundamental analysis
and the correlation between inflation, interest rates and the current Forex currency
rates. I would need another eBook just to explain this correlation furthermore.
2. Swing Traders
WHAT THEY DO?
They open and close positions lasting from 1 day to 15 days. They aim to exploit
mid-term trends because 1 week is considered mid-term in Forex Trading. Swing
traders are some of the most successful Forex Traders there is. They avoid trading
intraday as they don’t like the so called ‘market noise’ of intraday trading.
REQUIREMENTS:
Swing trading is one of the best ways to trade Forex. In order to evolve as a Swing
Trader you need a little bit about everything. You need narrow spreads, reasonable
Forex Guide v1.0 – Qexpert.com
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