Category: Finance, Currency Trading.
Many forex traders try and make as much money as possible, and therefore always want to be in the market, but this is hard work, and inevitably leads to you taking a few dubious trading decisions which can often prove costly. By that I mean taking a position where all your favoured technical indicators are in harmony and indicate that a strong movement either up or down is highly likely.
The truth is that you can make just as much money as short- term traders and scalpers by looking for just one excellent trade per week which has the perfect set- up. If you ve been trading for any length of time you may have noticed that every so often you get what appears to be the perfect set- up( this occurs not only in the currency markets, but in other markets as well) . Just one of these per week can be enough to make an excellent living from forex trading, and you may even find that you get several of these ideal set- ups per week, depending on how many currencies you track and what time frame you are using. More often than not these positions can unwind and can potentially yield several hundred points profit, which has to be better than constantly scalping all day for a few points here and there. You can tailor this method to suit your own particular charting techniques. Alternatively you may trade over multiple time- frames and use the shorter time- frame to enter a position. For example if you use multiple technical indicators you can look for positions on the 4 hour or daily charts( to catch the big moves) and only look to enter a position when every single indicator you use correlates and strongly signals either a long or short position should be taken.
For example, you may look at the 4 hour, daily and weekly charts to see the overall trend and if they are all trending upwards, then look to, for instance enter a long position when the 1 hour chart indicates an oversold position. I think you ll agree that this has to be better than constantly sitting in front of your computer screen for hours on end looking to pick up 5- 10 points here and there, particularly if you have a full- time job or don t have the time to watch the markets all day. Obviously these two examples don t throw up possible trading opportunities all the time but when they do they can be very profitable, and the great thing is that you just need the occasional high probability trade to make good profits. There s nothing wrong with short- term trading, I do a lot of it myself, but taking the time to find high- probability longer term positions, where all the odds are in your favour, can be just as profitable, if not more so, and is far less stressful.
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