Choosing Your Trading Style

Now you must pick your style of trading. This is largely determined by which time frame you prefer to trade on.

Are you happy sitting in front of your trading terminal all day, entering and exiting multiple trades throughout the session? If so, scalping could be a good fit.

Perhaps you are only planning to trade part-time around other commitments, if so swing trading may be more suitable for you.

The amount of time you plan to put into trading is a very important factor when building a trading strategy. Scalpers trade in large volumes each day, constantly entering and exiting the market, seeking just a few pips of profit per trade. Swing traders, on the other hand, will leave trades open for days, weeks or even months at a time.

This is something that very much depends on each trader; there is no "best" trading style which will apply to everyone.

Credits:Roberto Rivero/edited and audited by Geovany C.Q

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Planning Your Trade Exit

Some traders do not appreciate that knowing when to exit the market is just as, if not more, important as knowing when to enter. Exit too early and you might not realize your profit target, exit too late and you may end up losing more than you should have. Take profits and stop losses are very important tools that every trader must use to manage their risk when trading. But as well as these tools, your trading strategy should include conditions for exiting the market. It might be a certain level of profit or a certain amount of loss. Or just as technical indicators trigger traders to enter the market, there may be another signal which causes them to leave. Credits: Roberto Rivero/e dited and audited by Geovany C.Q

How To Plan Your Market Entry

Now we get to the actual trading itself. The next step to building a trading strategy is to plan what your trigger will be to enter the market. For fundamental traders, this could be something like a change in monetary policy from a particular country. Perhaps when a central bank reduces its base rate, the fundamental trader will take a short position against that particular currency, or vice versa. A technical trader's entry to the market will be triggered by a technical indicator or patterns on a candlestick chart. So In reality, there are a whole host of different indicators that traders can use within their trading strategies. Credits: Roberto Rivero/e dited and audited by Geovany C.Q

Choosing A Market To Trade

The first step is to decide which financial market you will be trading. Will it be Crypto , Forex ? Commodities ? Perhaps the stock market? Although this may seem like an obvious first step, it is by all means an important one. Trading strategies will depend on the market which it is being traded on. What might work on the commodity market will not necessarily work in the stock market. Once you have chosen your desired market, if you have not done so already, ensure that you educate yourself thoroughly on that particular market. Credits: Roberto Rivero/e dited and audited by Geovany C.Q

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