What are the most common foreign exchange trading strategies? What are their characteristics?

Scalping: This strategy is suitable for traders who enjoy short-term or rapid price fluctuations. The scalp trading strategy focuses on accumulating small but frequent profits while minimizing losses. Although these short-term transactions only involve a few points of price fluctuations when using high leverage levels, slight execution errors can lead to significant losses. So scalp trading is a short-term trading strategy that involves frequent arbitrage in a short period of time.

Day Trading: This is another type of short-term strategy, where day traders generally do not leave trading overnight and choose to leave on the same day. This prevents them from being affected by market volatility without observing the market. Although intraday trading can be applied in all financial markets, it is the most common strategy in foreign exchange trading.

Position Trading: It is a long-term trading strategy that typically focuses on fundamental analysis, so position traders generally do not care about small fluctuations in the market because it does not affect the overall trend of the market. Observing central bank monetary policy, political events, and other fundamental factors is a concern for position traders. This strategy is suitable for patient traders, as trading events can be calculated over weeks, months, or even years.

Swing Trading: This strategy is suitable for traders who prefer the midline, allowing them to exit within a few days. The purpose of this strategy is to profit from changes in the high and low points of the band. Traders need to carefully analyze price changes in order to identify entry and exit points in order to arbitrage from this strategy. Although traders do not have to constantly stare at the screen, there is still a risk of overnight and price gaps.