There is a variety of Forex strategies. But how can one choose among all this diversity? The trading process when working with a manual strategy is completely under the trader's control. The trader does not face such unpleasant phenomena as lagging or redrawing of indicator signals. They are often the reason for unsuccessful market entry and loss-making trades. Manual trading helps to master all the rules of the technical, candlestick, and fundamental analysis of the chart faster.
When choosing a suitable Forex trading strategy, answer a few questions.
- How much time can you dedicate to trading? How long can you stay watching the trading terminal and markets?
- How much money are you ready to invest?
- What is your trading experience?
- How frequently do you want to enter and exit the market?
- How much profit from each transaction do you expect?
Amount of time devoted to trading
The first question is how much time you are willing to spend trading. It is clear that if you can devote only 30-60 minutes a day to trading in the evening after work, then short-term strategies such as scalping, intraday and swing trading are not for you. Imagine you’re trading at a time when the European session is over. The North American one is also about to close (check out the market hours of four major Forex trading sessions). In this case, you won’t have sufficient volatility for intraday trading, including scalping strategies.
Deposit amount
The second question is about your deposit size. If you have a small deposit and, at the same time, you have to comply with the money management rules, you cannot afford to set a wider Stop-Loss. In this case, it’s better to consider Forex strategies on smaller time frames.
Trading experience
Your trading experience matters. If you are just taking your first steps in the Forex market, you need to familiarize yourself with the trading platform and its features, indicators, orders, and trading psychology. At the very beginning, complex strategies with many rules and filters may seem overwhelming. You need to start with something basic.
Trading frequency
If you want to be a scalper, you should know that scalping requires experience, strong nerves, a volatile market, and spending hours sitting in front of the computer screen. If you prefer less frequent trades and a more relaxed trading environment, choose medium and long-term strategies. Learn about candlesticks and technical analysis, trend continuation and reversal patterns.
Desired profit
And finally, think how much you want to earn per transaction. The more the better, obviously. However, you should realistically assess your strengths and risk tolerance. If you are prone to risk, eager to grab luck by the tail, opt for scalping or piping strategies. That’s where you get a good adrenaline kick.
If you are a cautious person ready to move towards the goal slowly but surely, medium and long-term strategies will suit you best. As a rule, such trading styles use time frames from D1 and higher.
