Thursday, March 26, 2015

Different Strokes for Different Folks

After you’ve given some thought to the time and resources
you’re able to devote to currency trading and which approach
you favor (technical, fundamental, or a blend), the next step is
to settle on a trading style that best fits those choices.
There are as many different trading styles and market
approaches in FX as there are individuals in the market. But
most trading styles can be grouped into three main categories
that boil down to varying degrees of exposure to market risk.
The two main elements of market risk are time and relative
price movements. The longer you hold a position, the more
risk you’re exposed to. The more of a price change you’re
anticipating, the more risk you’re exposed to.
In the next few sections we detail the three main trading
styles and what they really mean for individual traders. Our
aim here is not to advocate for any particular trading style,
because styles frequently overlap, and you can adopt different
styles for different trade opportunities or different market
conditions. Instead, our goal is to give you an idea of the various
approaches used by forex market professionals so you
can understand the basis of each style.

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