To choose your forex trading style is probably the most important thing for a trader. I think you must try more than one way. I guess trading style and off course timeframe depends not only on you time, when you can trade, also it is crucial to choose trading style best suitable for your needs. For me, best trading style is swing, in other words, “set and forget” style.
There are a few traditional trading methods:
It is a very active trading style. You can make many trades per day. Your goal is to earn 5-15 pips per trade.
For newbies, it looks that scalping is the best choice. They frequently begin with a small deposit and want to grow capital trading many trades per day. But with more trades you make more mistakes. Also, scalping does require much more time near a computer.
Day trading trader
Day traders usually make a few or even one trade per day. It is an excellent alternative for people who have a regular daytime job and want to become a part-time forex trader. You don’t need to spend a lot of hours near a computer. Day traders mostly close their trades on the same day.
My favorite trading style, you can open 1-2 trades or less per week and even not every week. This trading method lets forex trader hold their trade for days or even weeks. This is a trading style, and then you keep your trades from one day to couple weeks or even months. That is the best trading solution for people who can allow themselves to make analysis only for a few hours per workweek.
What is the best forex trading style for you?
As I mentioned above, to know what is best suitable for you, of course, you should try all methods (in demo trading).
First of all, it depends on how much free time do you have. For instance, if you work on a regular day job, I think day trading or swing trading are a trading style you should concentrate on. Second, you need to know what is your target, that means if you want to earn about 200 pips of profit, you can’t trade scalping or even day trading, you should focus on swing trading.
Trading style depends on you, but not just on how much time you want to spend working, but it also depends on your personality and psychology.
Keep in mind that scalping is dangerous and very hard psychologically. Scalping requires making a lot of trades with just a few pip profit or loss. You have to spend all day sitting and looking for setups. By the way, scalping is not a good system because of money management. Usually, your risk/reward ratio is 1:1 or even 1,5:1. That means you are risking 1$ or 2$ to make a 1$ profit.
Day trading and swing trading are much more psychologically comfortable than scalping.
Time frames for forex trading style:
Optimal time frames: 1 hour, 30 minutes, 15 minutes, 5-minute charts
Even if your target is ten pips, you should see the big picture, that means if you open trade in 5 minutes time frame, don’t avoid viewing 1 hour, 4-hour charts.
Optimal time frames: Daily, 4 hours, 1-hour charts
Day traders focus on the daily charts and are looking for setups to enter a trade in smaller, 4 or 1 hour time frames.
Optimal time frames: Monthly, weekly, daily 4 hours charts
That’s my trading style, first of all, I am looking at daily charts, and then enter to weekly and monthly time frames. I don’t trade only looking at a daily chart; it’s really important for me to analyze weekly and monthly bars. Because of my trading style, I Am looking for confirmations in all three-time frames: daily, weekly and monthly.
The important thing, that then you trade in bigger time frames you can filter many market noises. Don‘t think that if you trade in smaller timeframes and make more trades with smallest targets, you will make more money than trading swing style, especially if you have a small deposit. Swing trading lets you avoid much more stop losses than scalp trading. Of course, then you trade, swing trade you can hold the position for a week and after that get a stop loss.
From my practice, I can ensure that you can trade following more than one trading style, for example, swing trading and day trading, but make sure you do it in separate trading accounts.