Finding a trading style that works for you and suits you as an individual trader is important in trading any market, not just Forex. Success is seldom found in trading by copying 100% what someone else does, and not going through the process of understanding what trading style suits you best. The reason for this is that there are many variables that go into a trading methodology and style, to name a few:

The answers to these questions will be different for most traders, and therefore their style and approach will also need to be different. If you trade a style that works for someone who has 2 hours a day to trade at the start of each day, and you only have 30 minutes each day at the end of the day, then probably the approach won’t work for you. If you trade a style that works for someone who has $25,000+ in their account, and you have much less than that, then probably the approach won’t work for you. But that doesn’t mean that other approaches can’t work for you.

The beauty of trading is that there are so many ways to be profitable. You can combine the variables that work for you in the right way and still find an approach that can work with that. The mistake most forex traders (and traders in general for that matter) make is that they try to mold themselves to a style they’ve learned, rather than find the style that suits them as they are already.

When we say “style” in trading, we usually refer to the following:

No one style is better than another, no one style is “more profitable” than another, they work for different people based on the lifestyles, capital, and personalities of the individuals. It can help to have a nutshell idea of what the different trading styles can mean:

Trades LastTime TradingAdvantagesDisadvantages
Day TraderA few minutes – a few hoursUp to 2 hours per dayReturns can be quickerRequires strict time allocation and more time given Requires most resilience
Swing TraderA few hours – a few days/weeksUp to 2 hours per dayLess immediate pressure Can have trades running in parallelA little more patience required. Still some form of regular time allocation needed.
Position TraderA few weeks to a few monthsUp to 5 hours a weekLess time needed More flexible on time allocationReturns likely to be slower More patience required
InvestorA few months to a few yearsUp to 2 hours a weekEven less time needed Most flexible on time allocation Easier to run multiple trades/investments in parallelReturns likely to be slower Most patience required

Different asset classes lend themselves better to certain styles. Forex is the biggest asset class in the world, by a huge mile – this makes it quite diverse and allows us to take advantage of the moves on small to bigger time-frames, capitalizing with almost any style. It also offers decent leverage, so it’s easier to trade with smaller accounts, which makes shorter-term trading more efficient (if you’re running a profitable strategy of course!)

However, if you’re thinking of Day Trading forex, it’s good to bear the following in mind:

Of course, there are profitable forex traders who day trade, but in my experience, it may be a little bit harder than if someone were to swing or position trade, or even invest in the forex markets.

By weighing up your time availability, how often you can trade, and how strict you can be with your time allocation, what your goals are and what you’re like as a person, this should guide you towards the style that works best for you. Then you will need to tweak your methodology accordingly, be that change of time-frames used, different risk management rules etc.

Ultimately, the style of trading does not by itself dictate likelihood of success, but instead how it relates to you as an individual person and trader. Pursuing the style that suits you best, whichever style that is, is the one that’s most likely to bring you the success you wish to see in your trading.

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Becky Hayman