Saturday, October 21, 2017

Choosing Between Trend Type or Price Action Type of Trading

June 24, 2015 by  
Filed under Forex FAQ & Latest Post

In today forex faq, we have a question from one of our fellow traders asking me about the different type of trading style and whether he can trade both styles or not.

Below is the question:

Good day Kevin

I have seen that there are different types of traders, the trend type and price action type.

Will it be wrong for me to find myself trading both so that whenever i cant establish the trend I can revert to price action or must I always stick to one trading type?

So let me elaborate on your question a bit so that all readers can understand what you are asking.

– The trend type trading refers to trading in the direction of the trend.

– The price action type of trading refers to trades that are taken based on the formation of the candlesticks and indicators like the MACD divergence. This means that you can trade against the trend as long as the candlesticks and indicators tell you so.

It could sometime also be range trading as well.

In fact, you do not need to choose only one type of trading style as you will find that you do not have trades when the market condition is not suiting your trading style.

For example, you decided to become a trend trader which means that you will only enter trades that are riding the trend. However when the market started to move sideways, you will find that you have not much trading opportunity and that is why I formulated 8 strategies to use for myself which is also taught in the Forex Street University Course.

You can definitely choose to be both type of traders so that you can trade in most market conditions. However if you are just starting out, I will suggest that you focus on one type of trading style until you are able to produce consecutive profitable months with the trading style.

Once you manage to achieve that, you can then add another trading style to your trading. If you plan to become a full time trader, you must be able to trade in most market condition so that you can have income every single month irregardless of what type of market condition it is at the moment.

Personally, I will suggest that you start with the trend trading style as it is much more easier to trade in the direction of the trend than against it. In fact, you need to be very experienced in order to profit from trading against the market trend.

For those of you who are new to trading or are still struggling in your trading, I will suggest that you keep a lookout for strategy that teaches you how to ride the trend first. With the help of the trend, you will find that it is easier to trade.

I hope that I have answered your question and do feel free to give your comment below if you have question.

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