The Forex Trading Course: A Self-Study Guide to Becoming a Successful Currency Trader, 2nd Edition

Chapter 14Trading Styles and Strategies

One of the major reasons that forex trading has such a wide appeal is the presence of different trading styles and strategies that can be applied. Those traders looking for very quick moves can adapt scalping strategies and tactics. A great portion of forex traders put on trades that have moderate-size intraday durations that allow the currency pair to move through a range. These traders go for 10- to 30-pip moves. Multiple-day trades allow for larger profit objectives of 100 pips or more. Forex trading can also include the goal of trading for income. This goal is featured in carry trades and is a dominant strategy of large hedge funds and institutions. But carry trades are also possible for the average retail trader.

The beginning trader should explore many of these styles and strategies by creating trading setups that use a combination of technical indicators and chart patterns to pinpoint conditions for a trade. Table 14.1 provides a matrix for grouping the strategies and the appropriate technical analysis tools to implement them.

Table 14.1 Trading Styles and Associated Setups

Style of Trader	Profit Goal	Duration of Trade	Tech Tools and Tactics	Best Pattern
Scalper	5–10 pips	15 minutes or less	Five-minute trend-line charts	Parabolic
Renko 1-minute charts
Three-line break charts	Fib lines
News trader	5–15 pip scalp on news breakout	5 minutes to 2 hours	Pivot points + renko charting	Fib lines
Post-news trader