Which Trading Style is most Profitable in Forex?

The traders can do Forex trading through a number of trading styles as per their choices and requirements. These trading styles or trading strategies are designed by expert and skilled traders in order to help the other traders whether they are new or experienced to make good profit in the Forex market.

An individual trader needs to find the most profitable trading style in Forex to achieve their goals. They should focus on the winning trades and eradicate the losing trades to place profitable trades and make good returns on their investments. Therefore, the most important aspect of Forex trading is to identify the most profitable and successful trading style.

Most Profitable Trading Style in Forex

The most profitable trading styles in Forex are as follows:

Scalping

Scalping is a well-known and one of the most popular trading styles for the traders due to its volatility and liquidity in the Forex market. It is a profitable trading style for the traders if they are able to apply the right exit strategy.

Scalping is totally based on small price movements of different currency pairs and securities in the Forex market. It is a completely opposite approach from which a trader doesn’t need to hold a trade position for hours, days or weeks.

Scalping involves the buying or selling of multiple trade positions in a bidding system so that the traders can make small but good profit margins on every trade position. This trading style helps the traders to capitalize on price movements in small increments in the financial markets where price action of different currency pairs moves constantly.

Day Trading

Day trading is the process of trading different currency pairs and securities in one trading day. It clearly means that a trader needs to open and close all their trade positions within a single trading day. This trading style is applicable in almost all financial markets but it is most commonly used in the Forex market.

It is also one of the most profitable trading styles for the traders as not even a single trade position remains open overnight in this trading style that helps in minimizing the risks. But it is also important for Day traders to stay active and alert all day for monitoring and managing all open trade positions. The traders can generate new trading ideas through 30-min and 1-hour time frames in this trading style.

Day trading is a fast-paced trading style in which the capital of the traders or investors doesn’t get stuck with one currency pair or stock. The traders who choose this trading style can make huge profits from falling price movements by selling their currency pairs, securities and different assets quickly.

Position Trading

Position trading is a long term trading style that is fully based on the fundamental factors. The minor fluctuations in the Forex market are not considered in this trading style. Therefore, this trading style is profitable for those traders who want to focus on long term trends.

The number of transactions per day is very minimal in Position trading. Hence, the traders don’t need to pay extra charges like brokerage fees or commissions ona regular basis. Also, the traders don’t need to monitor or analyse the financial markets every day. Therefore, it requires less attention from the traders towards the market trends.

Position trading mainly deals in all trading instruments including indices, stocks, commodities and Forex pairs. This trading style is also termed as hybrid trading through which the traders will get stability and peace of long term investments as they will get high returns in future.

Leave a Comment