Trading without a strategy is little more than gambling, so you should always have a plan for your money when investing. There are four notable ways to approach currency trading that can be defined as follows:
Fast paced trading that looks to get in and out of a trade within the same day. Trades can be a few minutes or a few hours long, but the aim is to take advantage of the price fluctuations that take place in the daily markets. This means lower profit per trade, but more frequent trades.
A more complex approach that requires a deeper understanding of medium-term influences on currency prices and the ability to ignore daily fluctuations to see though the overall position. Trades can last weeks and even months, so less trades, but significantly higher profits on each successful trade when compared to day trading.
Also known as trend trading, the idea is that the trader rides the wave of the market in one direction, and then follows it as it turns the other way. The skill here is identifying new trends, the ‘swing’ as the market turns from up to down and vice-versa. Trades last days, possible a week or two, so fall in between day and position trading. Similarly, trade frequency and profitability per trade fall in the middle of the day and position trading approaches too.
The final approach is often seen as part of day trading, but scalping is something different, with trades lasting minutes, sometimes even less. The aim is to take advantage of the difference between the bid and ask prices in a market, and make regular, small gains throughout the trading session. This method looks for the smallest profit per trade, but by far the highest frequency of trading.
ALL trading approaches have their advantages, and all equally have some disadvantages, the key to successful trading is to find the approach that suits you best. If you are impatient, perhaps the longer-term strategies will not suit you, but day trading and scalping would be more your style. Trading requires to you to take a good look at yourself as well as the markets, and then match your approach to your own personality.
THE SCALPING STRATEGY
The Scalping strategy is a "short trading timeframe" strategy. It's also popular because of the differences between the bid price buying and the asking price selling, as well as the trading profit earned while trading in this particular strategy. For a quiet market and for smaller amounts, the Scalping market is efficient.