Its has been a struggle for new traders to how to choose from swing trading and scalping as short term risks are always better for them to get small profits and build their accounts and they try using lot of indicators and expert advisors to see the results if it suits their trading style and yet it never did they never been able to admit that there is no such path of success that leads to shortest way to get there and scalping is such an illusion that traders find themelves very difficult to get out of those short term money making techniques.
How to use selective approach and be versatile in Forex
As a young trader, everyone use to try everything, atleast for first few years and it has been happening to everyone of us, not to every 2 or 3 out of 10 traders but 9 out of 10 traders using same techniques and mistakes over the years, but technology has changes and everything is made available so easily these days, but choice and control depends on traders as it always been the case.
But how and when is always the biggest question arising out of minds. So, lets start this journey with few checklists that we always need to be aware of while picking up choices between swing trading and scalping.
To start off, scalping is a technique which we use to trade to pick up small profits by entering a suitable pairs for several times a day .let's say scalp euro for 10 pips with stop 3-5 pips and do that 3 to 4 times a day and you succeed half of the times. So risking 5x4=20 to make 10x4=40 which means reward should always be 2 times or more.
In the process mentioned above even If you win half of the times you still make 20 pips and even if you loss three you still loose only 5 pips for the day and it is easy to recover next day and hope you win 3 out of 4 and that process continues and you start to believe in yourself that slowly and surely you can built such techniques and from time to time apply filters to make these scalping technique much improved and easy to use to identify setup to make a sound living out of Forex.
That statement tells us the importance of money management skills that we use to implement in our trading no matter what strategy we use and no matter which trading style we adopt but now the question is which strategy is so powerful that help us identify the direction and pinpoint stops and profit target that we can use the entire day or even a single session on day to day basis.
Simple answer here is adaptability and our accessing power tells us pairs that are trending and for this we should not be limited to a single cross and pick multiple pairs that are trending and find trade locations which tells us the probable profit potential.
Simply pick gbp/jpy and pairs which trend strongly everyday and yen paris hardly offers extended choppiness and are best to use while swing trading and necessary tools you need to pick up trend with entry and exits are being discussed in details below.
Necessary Tools to pick for Swing Trading
You can pick any indicator for scalping and for this purpose I pick bollinger bands, RSI and fibonacci.(settings are not important as you can use default platform settings)
Forex trading is not easy but swing trading and scalping as short term risks. This is really good way to trade in Forex. Thanks for sharing.
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