But this is a general rule. As you progress in Forex trading you will find the specific type of trading that suits you best. There are three main "styles" of trading.
- Swing-trading. Swing-traders go after large pip targets - anything up to 500 pips or even more. They are often "position traders", leaving trades open for days on end. Usually they trade one or two lots and set "stop-losses" of about 50-100 pips.
- Day-trading. Day-trading means getting in and out of a trade over a period of hours, within one day. Day-traders trade one, two or a few lots and aim for 10-20 pips.
- Scalping. Scalping means trading multiple lots to catch 5-10 pips, often within minutes. If you capture 10 pips with 10 lots this can equal $1000 profit.
The most common type of trading is day-trading. Look back at the post of December 14, 2007 on this blog that explained more about day-trading and how Easy-Forex's unique features can make this type of trading especially profitable and risk free.
All three styles of trading have their pros and cons and we all find our personal preferences as we progress in confidence in Forex trading. If you are not too confident as yet, remember one thing: The larger the pip target you are aiming for, the greater the chance that the market will turn around before it reaches your target. So the smaller the pip target you are aiming for, the greater your chance of reaching it. If you can initially learn to capture 10-20 pips per day on a consistent basis, you will grow immensely in confidence and this will help you become more ambitious.
There is more to learn at http://www.bizwrite.co.uk/Forex/forexindex.html