Sometimes we are asked, what kind of Forex Trader when we meet with other people, the more experience in this area. In General, there are four basic strategies with which the Forex traders in the Manipulation of the foreign exchange market. Known as Intraday Scalping, Swing or carry and each of them have different approaches to profit from the foreign exchange market.
Intraday or in the simple sense “in the course of the day”. Intraday changess price search is particularly important for short-term traders a lot of transactions within one trading session. The term Intraday is usually used for the description of the securities, trading in the markets during the usual business hours, for example, ETFs and indices, which the Dealer must be purchased, unlike mutual funds. This term is often used to make new highs and lows in security. For example, “the new Intraday high” means a security, a new Maximum is reached in relation to all other prices during the trading session. In some cases, intraday high-end price can be equal. Traders pay close attention to Intraday price movement by the use of graphics in real time in an attempt to profit from short-term price fluctuations.
Scalping is a Trading strategy designed by traders for the purchase of the currency pair and then hold it for a short period of time in an attempt to make a profit. Forex Scalper hopes to make a large number of transactions and earn a small profit each time. Forex Scalping means that a large number of levers so that a small change in the currency in which the profit is. Strategy Forex Scalping System can be either manual or automatically. And the Management System includes the traders sit in front of the Monitor, looking for signals and interpreting whether to buy or sell. In an automated trading system, trader trainee Software looking for signals and how to interpret them. It is believed that automated Trading now have the upper hand on the human psychology of the trade, what is important in Forex Scalping in the fast-changing environment, it can monitor difficult for the traders to.
Swing Trading style is, trying to earn on the stock within one to four days. Swing traders use technical analysis to price look for stocks with short-term Momentum. These traders are not interested in the fundamentals or the intrinsic value of the stock, and in their price trends and models. The trader must act quickly, a Situation, the stock has the extraordinary potential to move in such a short period of time. So, Swing Trading is mainly used at home and Day traders. Large institutions trade in sizes too big to get in and out of the inventory quickly. Individual traders to manipulate the possibility of such inventories short-term changes without the need to compete with the big retailers.
To wear is a method in which an Investor sells a certain currency with a relatively low interest rate and uses the funds for the purchase of a different currency to the high interest rates. Trader using this method tries to capture the difference between the rates, depending on the arm circumference, which can often be substantial. For example, a trader with a 1000 Yen in a Japanese Bank, converts the funds into U.S. dollars and buys the bonds on the counter value. Let us assume that the bond is 4.5%, while the Japanese interest rate of 0%. The trader make a profit in the amount of 4.5% as long as the exchange rate of the country does not change.
Many professional traders use this Carry trade because of the profit can be very large, if the shoulder be considered. If the dealer uses the General 10:1 ratio, then the trader can a profit of 45%. A big risk with Carry trades is the uncertainty of exchange rates. With the above scenarios, if the US Dollar falls in value against the Japanese Yen, the trader runs the risk of losing money. Also, this surgery is usually done with a large leverage, so that a small movement of exchange rates can lead to large losses if the Position подстраховывается correctly.
However, these four strategies not only within a type of Forex. A Forex Trader can only one of these four strategies, or sometimes, perhaps, the Association of two or more strategies for the Manipulation in the foreign exchange market. Each of the strategies have advantages and disadvantages, respectively, so it depends on the Forex Trader to implement his strategy properly.