Main Strategies of Forex Trading Time Frame – 2021 Guide

Source: unsplash.com

Beginners ask the question of which timeframe will be best to achieve success. The answer is that it depends on a traders’ own desires and style of trading. The success of the timeframe is determined by the strategy that is being implemented by the people. When people use the right techniques at the right time, he or she will able to make good profits. So, investors try to apply different types of strategy which helps them to get good outcomes. But never make your trading system extremely complex as it create immense pressure. And as a rookie trader, you won’t be able to deal with the extreme stress. Focus on the long term market dynamics and try to lower down the risk in every possible way.

Those who are completely new to the trading profession, might buy expensive trading system form the novice traders. But no one can succeed at trading by using some other people trading system. To make money, you have to take rational steps and learn to trade with strict discipline. Once you become good at analyzing the important market details, you will realize why you should not never purchase a trading system. In this article, we are going to discuss some of the most important trading strategies mostly used by the highly trained traders. 

Position Trading

Source: unsplash.com

Most of the time, new traders ignore position trading as here they are required to hold the position for a long period. However, for many investors, this is more difficult to trade in a short-term period than in the long term. So, they choose this. Here, people use the price action strategy to find the trends. They use indicators too. There is a higher possibility that the trade will be influenced by the various news events. People are also required to pay extra charges to their broker as they will hold the position overnight. The main fact is that there is less chance of doing more trades. So, investors should be patient to become successful.

Being a new position trader, you have to very careful about the execution of the trade. Just because you are taking the trades in the higher time frame, doesn’t mean you will be able to earn more money. To push your trading technique, into the next level, you must follow strategic risk management in each trade.

Swing Trading

Source: unsplash.com

This is slightly shorter than the position trading. This is between the short-term and long-term time frame. One of the advantages of this strategy is that investors able to get the benefits of both styles. So, this is so famous among traders. People do not need to monitor the market all the time. When they find a good entry signal, they execute the trade. Another benefit of this style is that the investor is still searching at charts frequently enough to grab the better option as he or she exists. This abolishes one of the drawbacks of a longer-term position in which entries are usually put down on the weekly or daily chart. As a novice Aussie trader, use this link to open a professional demo account and learn about the essential factors of a demo trading environment with managed risk.

The novice swing traders often loses money since they don’t have the ability to deal with the complicated market nature. They make the switch to the lower time frame and expect to earn big amount of money. Unless you are good at trading the lower time frame, you should always use the daily chart to swing trade the market. Once you have mastered this skill, you can use swing trading method in any time frame.

Day trading

Source: unsplash.com

Day trading can be one of the toughest strategies to use when trading. Beginners apply this by exposing themselves to more often decisions that may not have been exercised for very long. This mingling of experience and constancy opens the door to losses that might have been averted had the investor selected a bit of a longer approach like the swing trading strategy. A scalper or day trader is in the disagreeable position of needing the value to move swiftly in the direction of the trade. Therefore, day traders become stuck to the charts as they search the market’s trends for that day. Preoccupying yourself with charts for long periods of time can make you weary. The shorter-term perspective also gives you a small margin for error. 

Usually, there is less profit in the short-term strategy which steers you towards tighter stop levels. These tighter stops mean higher possibilities of losing streak as in opposed to the longer-term approach. To trade with a very short-term perspective, it is sensible for an investor to get used to a longer-term, swing-trading perspective before going down to the extremely short timeframes. While trading the shorter time frame, try to evaluate the news data. This will dramatically reduce the losses and allow you to ride the big market movement. Take your time and look at the professional traders technique to get a clear idea about the importance of money management.

Quick Scalping

Source: unsplash.com

Quick scalping is mostly preferred by novices. Here, investors does not need to be patient for a long time. There is a higher chance of doing overtrading as investors hold the position for a few seconds. People should be very careful about every move of the market, so they are required to monitor the market properly. In this position, people make huge mistakes because they are not able to control their emotions.  

People can choose any style they want. However, investors should know about the pros and cons of each style. Some of the novice traders might think they know everything about this market. But such attitude force them to take the trades in the wrong manner. In order to survive in the retail trading industry, you must learn to take the trades with low risk. This will allow you to embrace more losing trades. When you have the ability to accept the losses, you won’t feel any stress while taking the trades.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

23  −    =  16