There are different type of traders and different styles of trading. Therefore they use different chart timeframes. Some traders may think that one chart timeframe can be more profitable than other. But it was not my experience. The timeframe does play importance with your trading schedule. Swing traders may use 4 hour or daily charts. Day traders usually use 15-minute chart. In this article I would like to focus more on day trading.
Usually full time traders are involved in Forex day trading. I believe the day trading style is the most stressful type of trading. You need to be in a grate control of your emotions to be able to watch price fluctuation. This is where most traders fail. It is really challenging to watch your trade unfold. We usually want the price go straight to the take-profit level. If your emotions fluctuate with the price it can be really exhausting to watch the price heading against your position. This are a few tips how you can confront that emotional roller coaster.
1. Test your trading system.
I am a strong believer in testing the system before trading it on a live account. Become an expert with your system. Back test it on a historical data at least 100 times and do the forward testing on demo account for at least another 100 times. Once you know your trading system in and out you know how it behaves you will be less susceptible to trading errors due to your emotions
2. Watch the charts before you enter the trade.
This advice really helped me when I was struggling with my emotions during the trade. In a day trading I usually watch the charts only until the trading setup is formed. After I take a trade I live it alone for it to hit take-profit or stop-loss. If you are not very experienced trader this advice can be the best one for you. Otherwise your emotions may force you to violate your rules from time to time.
3. Focus on long term results.
Most traders live and die on the result of a single trade. The result of a single trade actually means very little. You should be evaluating your results after a big number of trades. It is easy to do for a day traders since they may take a few trades a day. As opposed to a swing trader how may take only a few trades a week or even a month. So a day trading results can be evaluated at the end of the month since a day trader on average may take one trade per day and have around 20 trades at the end of the month. If you follow this advice you will have much more success in trading. Most traders after their system hits a few losses get discouraged and switch to another system not giving a chance to any system to accumulate necessary statistic data to evaluate it's results.
These are very simple steps to follow for Forex day trading method. If they are followed consistently they can dramatically increase your potential to succeed.
Albert Schmidt is a part-time currency trader. After quite a long time of struggle he learned to make consistent profit trading in Forex. Review a trading strategy he successfully uses in his trades. |
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