Trade Arrangment

 

Any trader either a newbie or a professional should develop the most convenient and profitable trading system for himself. Trading strategy is one of the basic elements of the trading system. Undoubtedly, there are many trading strategies on the international currency exchange Forex market, but it does not mean that each of them can be applied by all traders. Before developing a trading system the trader should define which strategy will be the most appropriate. It should save trader’s time searching for the most applicable trading system. In order to decide on the trading strategy you have to take into account two factors:

 

 

- personality and internal constitution;

 

- financial capacities.

 

 

Most traders make a great mistake by following an unnatural trading strategy for them. The problem is that the major part of traders, regardless of their trade experience, does not think about that. The second reason is lack of financial resources in order to choose the most relevant trading strategy. Consequently, a trader does not have any other way except for choosing a strategy which meets the requirements of small capital, not taking account of the first component.

 

 

We consider all trading strategies as follows:

 

Intraday trade

 

 

Adherents of this type of trade are mostly beginners, it is connected with currency market dynamics which attracts novices. Intraday trade has the following peculiarities:

 

 

• Positions can be opened during one trading day and by the end of the day they should be closed or, in case of urgency, carried over the next trading day with setting protecting orders;

 

• All trades are short-term and meant for taking just a part of profit;

 

• Within a day the number of trades can be more than one;

 

• Intraday trading does not require huge financial investments;

 

• The work time interval is minute charts.

 

Intraweek trade

 

 

As a rule, traders, disappointed in intraday trade, try this strategy. Intraweek trade has no such furious market movement as in intraday trade. It may seem that market is motionless. But it is just at first sight. Intraweek trade has some peculiarities as follows:

 

 

• A trade can remain opened for ten days;

 

• All trades are counted on taking the most part of profit on market movement;

 

• As a rule, not more than 2 positions are opened during a week;

 

• Requirements for invested funds are much higher than for intraday trading;

 

• The work time time is multi-hour charts.

 

Positional trade in the direction of positive swaps

 

 

As a rule, positional trade is used only by patient traders. Positional trade is distinguished from the previous two by a pressure put on trader, and moreover, a trader has more free time. Positional trade has the following characteristics:

 

 

• The work time interval is daily and weekly charts;

 

• A trade can remain open during months;

 

• Requirements for invested capital are the highest, compared to the intraday and intraweek trades;

 

• An option of being outside the market during correction periods is available.

 

 

Probably, every trader can find additional definitions of the strategies, but the basis is one of these strategies to become ideal for you. In order every trader to be able to choose the most appropriate strategy for him/her, let us consider which strategies are applicable to different characteristics of a trader. However, strategy choosing is a responsibility of traders.

 

 

First, let us look through advantages and disadvantages of the intraday trade:

 

 

Advantages:

 

 

• Huge capital is not necessary;

 

• Trader may stop trading any time;

 

• Minimal risk;

 

 

Disadvantages:

 

 

• High emotional pressure;

 

• It is required much time for refreshment;

 

• Lack of time during a trading session.

 

 

This strategy is suitable for traders with a great endurance and virile character, quick reaction and strong nerves.

 

 

Intraweek strategy:

 

 

Pros:

 

 

• Insignificant pressure;

 

• High profitability;

 

• Less time is required for refreshment;

 

• There is free time during a trading session.

 

 

Cons:

 

 

• Significant volume of funds is required;

 

• Trader can be outside the market during the trend correction;

 

• Impossibility to stop trading at any moment;

 

• Necessity to hold opened position for 24 hours.

 

 

This strategy suits traders who combine such qualities as working capacity, deliberation and thoughtfulness, because first time trader will need to monitor positions 24 hours a day, analyzing all market changes. It is really timely at the moment of market trend formation. Meanwhile, usage of multi-hours charts will be uncomfortable for you due to signals which are shaped on the night bars.

 

 

Positional trade:

 

 

Pros:

 

 

• A lot of free time;

 

• No emotional pressure;

 

• No necessity in refreshment.

 

 

Cons:

 

 

• Periods of absolute inactivity;

 

• Impossibility to stop trade at any moment;

 

• Limited number of currency pairs for trading;

 

• Necessity in huge capital for trade.

 

 

This strategy suitrs traders who have a great patience, purposefulness and big funds.

 

 

In case you have achieved absolute coincidence of a trading strategy, your character and financial capacities, it would be a perfect variant for you.