I’v read lots about general forex investing, read up some strategy, and am keen to start playing with demo accounts. I’ve got a couple of trading styles I’ve got in mind that might fit me, and I’m going to try them out, but I was wondering what your opinions would be.
Firstly, I guess I should explain my aims from forex. I’m NOT trying to be a full time trader, and use forex as a day job. Atm i’ve got free time now, but i’ll be graduating at the end of the year, and so want to work out a style that I can continue whilst working professionally. I’m planning to use the free time that I do have to learn the theory, and form my own system. Eventually I would want forex trading to be a part of my investment portfolio, and the system needs to be flexible enough such that once I have more capital, the same system would apply (though just upgrading to larger lot sizes should fix that).
Time - Realistically, I will be able to commit about 1 hour every two days. Sometimes more, sometimes less (but will always be able to spare 10 mins a day just to check nothing major is happening).
Risk - I’m quite happy with a high risk/high return style strategy. This is where I’m a little confused with the 2% rule… whilst that would definately make sense if trading many times a day/week, should this still apply if i’m only trading say weekly?
I’ve come to the conclusion that one of the following three styles would best suit me… What do you reckon, and are there other styles i’m not thinking of?
Medium term trading… Probably holding positions for 4-14 days. I’m guessing at these sort of intervals, fundamentals would be starting to get important, and so my strategy would have to be pretty much 50% fundamental 50% technical analysis.
Carry trading. Pick a pair based on interest rates, and hold as long as I think the pair will stay favourable for me. Once not favourable (based on fundamental analysis), switch to another pair and keep going, with interest rate payoffs being the key goal. Am assuming I’d be holding positions for months.
Scalping in the times I do have available. I.e. set aside that 1 hour, and just go nuts during that 1 hour. Would this work? or would the gains be negligible and a waste of my hour?
So, what do you guys reckon would be the best style for would be? I’d really like to come up with something that I can keep using in the long term, i.e. over the next 20+years as a part of my investment portfolio.