Forex trading will be closely related to the personality of the trader himself, so that what we meet every forex trader has a style, strategy. If a novice trader has found his trading style and strategy, it will make it easier for him to succeed in making profits.
When a novice trader starts looking for strategies and trading styles that suit their personality, they will often encounter obstacles, which will discourage them. Here are 4 ways a trader can find a trading style and strategy:
1. FREQUENCY AND TIME FRAME
In forex trading, the first thing that must be found is the ideal Time Frame or matches the time we have. Let's look at the types of traders based on the time frame below:
Day Trading
Traders open and close on the same day, so the day trading time frame starts from 1 minute to H1.
Scalping
Scalping is a fast trading style, and is done in very short periods or time frames, usually around 1 minute to 30 minutes or less than 1 hour.
swing
Swing trading is a medium-term trading style with a time frame around H4 to W1.
Position (long-term)
Position is a long-term trading strategy, usually from 1 week to a month.
At this stage traders can try the strategies above one by one and choose the most suitable one, so they can find the ideal time frame, not the amount of profit generated.
2. BASE OF ANALYSIS
Every trader will have a tendency to use one of the more types of analysis or become a favorite before he opens a trading position, including:
-Fundamental analysis
Relying on economic news such as Gross Domestic Product (GDP),
interest rates, inflation etc. which will affect the value of a country's currency.
-Technical Analysis
Monitor the shape or pattern of currency price movements on the chart, so that you can determine entry and exit.
-Market Sentiment Analysis
Anticipate price movements in certain situations and analyze the trends of the majority of traders, such as Market Speculative Sentiment Index (Sell/Buy Ratio).
Of the three types of analysis, which is your favorite, although the combination method is also recommended by experts.
3. RISK TOLERANCE
In general, novice traders cannot determine what the ideal risk tolerance is when trading. but only as a benchmark we can group them into three levels
Low: risk below 1%.
Medium: risk between 1% and 2%.
High: risk above 2%.
Risk tolerance will depend on the trader's profile, if aggressive it may be above 5% for each trade. The ideal risk tolerance is one that is in accordance with the size of the capital, goals and convenience.
4. TRADING JOURNAL
Every trader needs to record/document his history of success and failure even on a demo account. comparing the percentage of profit and loss is necessary. so the trading journal must contain, the amount of profit and loss, trading strategy, entry level, Exit, Lot, Stop loss, Profit target etc.
So if with a certain trading style/strategy a trader can make more profits than losses in a certain time period, then there is certainly a match/fit with his personality.
When a novice trader starts looking for strategies and trading styles that suit their personality, they will often encounter obstacles, which will discourage them. Here are 4 ways a trader can find a trading style and strategy:
1. FREQUENCY AND TIME FRAME
In forex trading, the first thing that must be found is the ideal Time Frame or matches the time we have. Let's look at the types of traders based on the time frame below:
Day Trading
Traders open and close on the same day, so the day trading time frame starts from 1 minute to H1.
Scalping
Scalping is a fast trading style, and is done in very short periods or time frames, usually around 1 minute to 30 minutes or less than 1 hour.
swing
Swing trading is a medium-term trading style with a time frame around H4 to W1.
Position (long-term)
Position is a long-term trading strategy, usually from 1 week to a month.
At this stage traders can try the strategies above one by one and choose the most suitable one, so they can find the ideal time frame, not the amount of profit generated.
2. BASE OF ANALYSIS
Every trader will have a tendency to use one of the more types of analysis or become a favorite before he opens a trading position, including:
-Fundamental analysis
Relying on economic news such as Gross Domestic Product (GDP),
interest rates, inflation etc. which will affect the value of a country's currency.
-Technical Analysis
Monitor the shape or pattern of currency price movements on the chart, so that you can determine entry and exit.
-Market Sentiment Analysis
Anticipate price movements in certain situations and analyze the trends of the majority of traders, such as Market Speculative Sentiment Index (Sell/Buy Ratio).
Of the three types of analysis, which is your favorite, although the combination method is also recommended by experts.
3. RISK TOLERANCE
In general, novice traders cannot determine what the ideal risk tolerance is when trading. but only as a benchmark we can group them into three levels
Low: risk below 1%.
Medium: risk between 1% and 2%.
High: risk above 2%.
Risk tolerance will depend on the trader's profile, if aggressive it may be above 5% for each trade. The ideal risk tolerance is one that is in accordance with the size of the capital, goals and convenience.
4. TRADING JOURNAL
Every trader needs to record/document his history of success and failure even on a demo account. comparing the percentage of profit and loss is necessary. so the trading journal must contain, the amount of profit and loss, trading strategy, entry level, Exit, Lot, Stop loss, Profit target etc.
So if with a certain trading style/strategy a trader can make more profits than losses in a certain time period, then there is certainly a match/fit with his personality.
