Profits with Different Forex Trading Strategies
When you trade forex you are doing it to make a profit. This means that you should know what you can reasonably expect as a profit from each of the trading strategies. Certain strategies offer larger profits per trade while others offer smaller ones. You need to understand what you could get and what an unrealistic expectation would be.
The Types of Forex Trading Strategies
There are three general groups for forex trading strategies and they are short, medium and long-term. Each of these groups will have a number of strategies within them and they all have different profit expectations. Many traders assume that the long-term strategies offer the greatest profits, but this is not the case. When looking at the profits you can make you need to think about how much you make per trade and the number of trades you are going to make.
Short-Term Strategy Profits
With short-term strategies you can make a number of different sized profits. The profits you make relate to the short-term strategy you are going to be using. One short-term strategy is scalping and this offers very small profits per trade. However, the fact that scalpers often complete tens to hundreds of trades per day causes the profits to add up. A scalper can make the same amount in a day as any other type of day traders.
Day trend trading is another strategy that is used as a short-term trading strategy. While the profits you can make with these trades are larger than the scalper you cannot complete as many of them. This means that the overall daily profits that trend traders make could be the same as the scalper.
Medium-Term Strategy Profits
The most commonly used medium term strategy is swing trading. Swing trading often allows the trader to make the same profits as a day trend trader. However, as you have to hold the trade open for at least one day or more you are not able to open as many. This means that you could get less profit from this strategy than day trading. Of course, if your trade does very well then you can make more than a day trader.
Long-Term Strategy Profits
Positions trading is the most common long-term trading strategy. With this strategy you will open a position and hold it for a prolonged period of time. The amounts you can make from this can be much higher than shorter termed trades. Of course, the length of the trade means that you cannot open very many of these trades. You also need to have more money in your account to trade long-term.
Which Profits You Want
It is very hard to compare the profits you make from one strategy to the profits you make from another. The main reason behind this is that the strategies have different timeframes and different numbers of trades per day. If you are a scalper who completes hundreds of trades per day then you could make more than other traders. However, the stress levels of trading will also be higher and the danger of losing your money is higher. When you consider the profits you want to make you have to be realistic. This is why many expert traders state that you should not set monetary goals.
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