30.03.2012 Post in Trading

tradeOne can answer this question having estimated financial status, spare time and personality. Everybody who is familiar with the specificity of Forex market knows, that there are a few regimes of trading and hundreds of strategies, that is why a person can make an individual scheme of investing. Thus there is no super profitable system, still it is important to select the methods that are most convenient for you.

For example, long-term trading will be convenient for those who have considerable capital which can stand significant price fluctuations. The trades remain open for a long period of time – for months and even for years. If a trader has some skills of capital management and is able to make efficient analysis then the risk of losses becomes minimal. Trading long-tem requires less time spent in front of the computer, as there is no need to control trades 24 hours a day. Consequently, the stress is lower. Aside from that it is advisable to keep in mind that this strategy involves certain patience as it does not bring fast result. Moreover, not all instruments of the currency market are appropriate for long-term trading.

Intraday trading (short-term) demands less money, private traders as a rule conduct a lot of trades during the trading day which are of smaller volumes thus they get profit from short-term currency fluctuations. If the situation slightly changes for the negative, then it is possible to exit the market right away and the risks are not high, if one follows the rules of money management. However, the intraday trader should be stress resistant as he / she has to estimate the situation instantly and make fast decisions. The prices are constantly altering and it is impossible to have a free moment from the screen in order not to miss a profitable moment for conducting deals.

Midterm trading is peculiar as positions here are open for approximately 10 days. Thus there is some time for precise analysis and making a proper choice. In this case a larger initial capital can be necessary. The pressure is lower and the potential gain is higher. Still it should be kept in mind that exiting a trade when you want can be difficult.

smileIndividual trader is also considered as a profession. And every occupation requires professional skills as well as certain traits of character depending on the type of personality. Theoretically determining the sphere of activity, individual features of temper should also be considered in order to use one’s individual potential correctly. Thus in trading, having estimated one’s potential adequately, it is possible to find a more appropriate style of trading. The profit should not be the decisive moment here, as no strategy can guarantee instant wealth. At the same time every method of trading should be successful if one plans the trades correctly.

Added by Svetlana Degtyareva,
InstaForex Clients’ relationship manager