This article looks at the different types of FX trading that you can complete.
Completing FX trading can be fun, profitable and exciting. This is something that a lot of people look at and you should consider the different types of FX trading that you can do. There are three different classifications that you should consider because they will affect the way that you trade. Finding the right type of trading is important because it has to be trading that you are comfortable with and that suits your personality.
The Growth FX Trading
The first type of FX trading that you should know about is the growth trading. Traders who use growth trading will generally look at the upcoming and emerging economies. These currencies will allow you a lot of opportunities to trade. However, it is consider to be a more risky type of trading then many of the other trading types. This is due to the exotic currency pairs that you use being more volatile and often less liquid.
When you trade in this manner you need to be confident in what you are doing. The information that you need about the currency pairs should be easily available and you need to understand the drivers behind the currencies. If you do not then you are going to trade incorrectly and make more losses than profits on the market.
The Value Focussed Trading
The second type of trading that you should consider will be the value focussed trading. This is one of the safest trading types that you can use. When you are looking at value trading you will be using the commonly traded currency pairs. These currency pairs are considered to easiest to trade with because of the wealth of information that you can get.
The lower risks that you face with this trading make it ideal for all traders. Of course, there are ways to increase the risks that you use when you trade. However, you have to consider whether or not this is the best choice to make. An increase in your risks will increase the profits that you can make, but it will also increase the potential losses that you will face.
The Income Trading
Many traders make the mistake of thinking that all FX trading is income trading. This misconception comes from the fact that all traders want to make money when they trade. Income trading is actually about more than just the profits that you can make. When you look at income trading you are going to be looking at the safest trading that you can do on the forex market.
With income trading you are going to be focused on the preservation of your trading capital. The trading that you will do is going to be low risk and you are not going to make the same profits as other trading styles. However, you are more likely to be able to keep the profits that you are able to make. Traders who look at this trading need to use certain commonly traded currency pairs. The commonly traded pairs offer you greater security when you are trading than any of the other currency pairs.
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