What is the best strategy for short term Trading?

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Trading

Trading short-term or short-term can be very profitable, but also high risk. This type of trading is attracting traders with the possibility of money fast. Unlike the trading medium term and the long term, the main focus of short-term trading quickly takes the decision to buy or sell. In this article, the JustForex team is evaluating all the nuances of this type of trading activity.

In short-term trading, order opened for short periods, ranging from a few minutes to a few days. Traders got a profit by trading in a shorter timeframe. Short-term trading is usually done during the most volatile. Trade is driven mainly by technical analysis. At the same time, You should not forget about the fundamental analysis.

The following styles can be called short-term trading:

• Scalping. This method is regarded as the most aggressive method. Scalper gets results from the movement of the price of the transaction, the duration of short ranges from a few seconds up to minutes. They generally wear M1 timeframe up to M15 and executing several dozens to hundreds of orders per trading session.
• Day trading. This method is used by traders who prefer trading in one day and open one position up to a few hours. Day traders choose the graph on the timeframe of the M5 to H1. Day trading is not too risky and stressful than scalping. Profit is usually obtained at the end of the day.

To use the scalping and day trading, you need to have a lot of time spent sitting in front of a computer all day. As a rule, trading short-term trading needs attention and also tolerance to stress.

Forex strategies-short term

There are several forex strategies used for short-term trading. Let's look at the most popular.

#1 Support and Resistance

First, you need to determine the level of support and resistance in the higher timeframe (M30-H1). In this interval formed a significant level of support or resistance. Therefore You should identify the levels advance, then need to switch to a lower timeframe (M5-M15). Trading is done at the point of breakdown the levels or when there is a rebound from him.

Breakdown of the channel, the resistance or support line is a great option for the trading signal. Comply with this strategy would be beneficial, especially for traders who just started trading.

#2 Moving Average

The Moving Average is one of the technical indicators used in the Forex market. MA is an indicator that helps predict price movements, as well as determine the dynamics of the levels of support and resistance. The moving average is referred to as an indicator of the trend: If the price is above MA, price followed the trend bullish and vice versa.

Simple Moving Average (SMA) and the Exponential Moving Average (EMA) is the main type of MA. HIGH SCHOOL was formed by calculating average price during a certain period. This allows the trader to confirm the trend. Compared to the Moving Average, EMA has a smaller lag effect and are more likely to uncover trends.

For trading using short-term trends, team JustForex recommends wearing a short curve. Forex traders often wear system moving average crossover to get into the market. It was formed from the slow and the fast MA MA. When MA slow break out over that long, the prices will probably be flipping and up.

The experts also recommended using a moving average when it occurs in the market trends are evident.

#3 Moving Average Convergence Divergence (MACD)

The MACD indicator is an oscillator that allows traders to identify trends and look for a signal. It is formed of two moving averages and the histogram. To calculate the MACD is the difference between fast and slow moving average.

If the zero level drift of the histogram, you need to consider the signal to get into the market. Indicator MACD sells signal supply when it crosses the zero level from top to bottom.

#4 Candlestick patterns

Traders seek reversal candlestick patterns/reversal and the entrance to the market in the direction indicated by the specific candlestick pattern. The signal comes when prices pass through levels candlestick patterns. Every trade should be protected by stop loss. Technical analysis Price Action patterns and here are the most popular among traders: Triangle, Flag, Pennant, Double Top/Bottom, Inside the Bar, Outside the Bar, Pin Bar, and more.

For success in short-term trading, traders should follow the rules of money management. Short-term trading associated with risk, then don't forget to wear your stop loss.