Intermediate Guide

Different Types of Trading Strategies

There is wide range of approaches for the trader to interpret the price movements and get profit into their trades. There are some of the trading styles that will be discussed below:

- Scalping

Scalping is one of the most popular strategies in forex trading in which you characterize the price movement by the short period of time between the opening and the closing price of the trade.

The goal behind the scalping is to grab the very small amounts of the pips as a number of times to close the trade.

Scalping is the way to open the position of the market price at the ask and the bid price and then quickly close at the position where you get the higher or lower for a profit.

- Day Trading

Day Trading is one of the popular strategies to buy and sell financial instruments to take a small profit at a small price movement.

It is also the same as the scalping and short term trading style that will typically be used to trade a day and the closing it out when the day is about to end.

Day traders pay close attention to fundamental and technical analysis using different technical indicators like Moving Average Convergence Divergence, Relative Strength Index and Stochastic Oscillator etc.

The day trading will maximize the intraday profits to use one or multiple following trading Strategies:

  • Trend Trading
  • Countertrend Trading
  • Range Trading
  • Breakout Trading
  • News Trading
- Swing Trading

Swing Trading will be defined as the medium-term trading style that is used by the forex traders to swing the profit price. It will identify the possible trend conditions and hold the trades over the period of time in which you observe the period of time from a minimum of several weeks.

Types of Swing Trading

The different types of trading strategies used in swing traders.

  • Reversal Trading
  • Retracement Trading
  • Breakouts Trading
- Position Trading

Position Trading is one of the longest trading terms in which you have several months and years of trades. It will ignore the short term price movements and pinpointing the profit.

Types of Position Trading

It will relate to the fundamental analysis there is no mean of the technical analysis in this term. In position trades, it will tend to use the fundamental and technical analysis to evaluate the potential of the position of the price movements.

  • Trend Trading Using Moving Average(MA)
  • Support and Resistance Trading
  • Breakout Trading
  • Pullback Trading