Until this subject matter in your ability to do analysis of market movements have been very good. You have been able to perform technical analysis with various indicators even added a little Elliott or Fibonacci there. We congratulate! At least you have learned to trade forex using the analysis and no longer do calculate the studs or analysis of guess-guess the mangosteen fruit.
If cared for well then you will find that on many charts shown used a variety of different time frame. Sometimes used timeframe D1 (daily) or sometimes used H1 (1 hour). What does it mean? Well in trading, often we do not just simply using one graph only for one currency pair currency where we trade. It is wise to trading with multiple time frames.
The use of various time frame will help us to determine 2 things, namely:
1 long-term global Trend is going on
2 the right time to do the Buy/Sell execution
Both of the above are crucial part in trade. Imagine if you do not know the long-term trend is going on. And because the graph is 1 hour or 15 minutes you showed the trend was leading to downtrend and we open a sell position. While the trend in the long term but showed prices were rising. Now what will happen?
In a short period of time (a few hours ahead) When Your technical analysis valid enough maybe your position will profit but not if you hold your position until the days for example. Due to the daily price trend shows up then slowly towards a position of profit you will soon turn into minuses. That wretched again if you are not using a Stop Loss so likely Margin Call will occur. Up here the big hassles will come soon including the social effects that arise as you experience a loss.
Well this is where the importance of Us using multiple time frames in the trade. Most traders use a larger time frame to determine long-term trends such as 4 h (4 hours) or D1 (daily). Whereas, to determine the position of the intake then you need a shorter time frame could be 15 m (15 minutes) or H1 (1 hour). Now matter which one is used, it all depends on your trading way. Everyone has differing trading cycles. There is an open position and after days or even up to a month's new position is closed (this is called a swing trader) or some are just in a matter of hours, her position has been opened and closed many times. Let us learn one by one.
Swing Trader, Day Trader and Scalper
As already explained above that everyone has its own trading cycle. Some people due to time keterbatasaan can not see the price at any time (like me. ..) so choose to behave more like a passive policy of a Warren Buffet.
There are also some people who have the time and sufficient access allowing it to monitor the price movement and try to take the maximum profit possible in the world of forex. Thus he tried to open a trading position daily.
As already explained above that everyone has its own trading cycle. Some people due to time keterbatasaan can not see the price at any time (like me. ..) so choose to behave more like a passive policy of a Warren Buffet.
There are also some people who have the time and sufficient access allowing it to monitor the price movement and try to take the maximum profit possible in the world of forex. Thus he tried to open a trading position daily.
Swing Trader
Are those who decide to trade by way of the first. The Swing trader tends to hold his position until berhar days up to several months. Some even hold its position up to one year! A trader with a pattern like this tend to wait until the price is at his best position and then aiming to open a lot and put a big enough profit target. They usually open a position only at the very extreme conditions where prices are very high or very low rate according to the history the movement in the past few weeks. Because these conditions are not too frequent then once they get the chance then chased the target is very large and well balanced with sufficient funds to withstand price movements because they usually determine the Stop Loss point is also larger. That's why the Swinger is often start trading them with hefty capital of about $ 3000 for a mini trading.
The Swinger more often use the daily time frame or 4 h to determine their long-term trend. For a Buy or Sell decision making, they usually simply use graph 1 h only. The meaning of this: at a time when they were about to find a fitting moment to open position then they will open the chart 1 d or 4 h them. Then they determine whether a trend is taking place when the 1 d on the graph. If the trend shows an uptrend towards the situation with then they will simply look for a Buy and a sell position will not open at all.
Next they will be looking for the right time to open a position. The trick is to wait for the H1 chart is in the same direction with D1. Meaning if D1 shows the direction up the Swinger would wait time where H1 is also indicates direction up. After that a Buy else done. When they get it they usually will determine how their profit target. The average trader by type like this will pursue profit target above 100 points so that it takes a few days to a few weeks to get there.
The other thing you need to know is the Swinger is even not hesitate doing action counter trend only to take the opening position. For example, when prices had already reached the area jenuhnya (let's say the Overbought) then they are not afraid to take a position Sell despite rising trend has not yet ended. Their assumption is for the sake of saving time because they mostly do not like their ongoing graphic monitor. That's why they have enough capital to withstand a large price movement such assuming that it is no longer the price will move down even though at the moment still being in the trend rising.
The advantages of trade with this kind of model is the first in the analysis is relatively easier. Keep in mind that the greater the time frame that we use then it will be easier for us to predict future price movements. Instead the smaller time frame being used it will be increasingly difficult for us to predict movements correctly. This is because with a smaller time frame charts are often more jagged (whipsaw) making it difficult to read the main trend.
Other conveniences are on the side of the psychological pressure. Due to the Swinger using larger time frame then they usually do not need to monitor the movement of a graph every hour or every minute. Enough only once in a single day was not the problem. As a result they will be more comfortable psychologically and spared from market pressure in every movement. Well the happier life, isn't it? And for the same reason they usually can do their daily activities in addition to trading with either.
The Drawback? Of course there is! The most fundamental flaws in the pattern of trade with a Swing as it is on the issue of capital. You can not do Swing trading only with a capital of $ 500! Due to Stop Loss imposed long enough then usually they need capital does little to trade. At least $ 2000. It was already very at least once. Not to mention if they are playing is not enough with just 1 lot only for one-time opening position, then the included capital could reach several times the ranging $ 4000 even up to tens of thousands of dollars.
The second issue in swing trading is present on the occasion were obtained. Often the Swinger it could not open position while the other type of trader as Day Trader or Scalper can menangguk advantage on existing movements. The cause was an opportunity for the Swinger is far less than other types of traders. That's because they have to wait for the price to be on the second extreme point to open position. When price was playing in the mediannya (Central line) then they can't do anything other than wait. A tedious job!
Day Trader
A trader with a daily model. This type of trader usually opens its position and close the same day. The longest is only in the range of a few days and the week passes very rarely run. It means as much as possible they will close their positions before the beginning of the next week starts. So if they opened up a position Thursday, then Saturday morning before they will cover their positions because they don't like waiting until Monday, where the patterns and the new trend is taking place.
Well the Day Traders usually use 4 h or 1 h time frame as a determinant of long term trends. As for the daily execution they prefer to use the time frame 15 m.
Due to the time frame and time short, trading profit target they are not too large. There is only in the range below 100 points. Most are about 30-50 points. But precisely because their profit target is not too big so they can perform the opening position several times in one day. In fact I never met a day trader who trade up to 13 lots in one day when the initial deposit he had put a $ 500 only!! This is a very active day traders.
There are many benefits to be gained when someone did a day trader. It primarily is on a initial deposit is made. A day trader can start only with a capital of $ 1000 only. Even some who had become able to develop a trading fund to hundreds of percent in a few months when they start from only $ 500 only. Even so it is not advised to start trading only with a capital of $ 500 due to the magnitude of the risk that may occur if you are a beginner. However capital cannot be lied to. Do you guys agree with Pak a teacher kids?
Other benefits when you trade with a pattern day trader is on a number of occasions that could be taken. Due to the profit target chased no more than 100 points, this opportunity can arise almost daily in various types of major currency pairs. If you're pretty clever, that prices are up or down in the waves, a day trader is able to get profit from there. The day trader not too sweat the long term trend will be like a Swinger. This is due to their trading is today. By looking at the movement of today's market conditions then could be taken. That's why they use the time frame is relatively shorter as 15 m or 10 m.
Deficiencies in trading with such a pattern of course exist. If at a Swinger is usually present on the easy control of the position of the price, it is easy to become a day trader constraint. A day trader must be strong enough to monitor the price movement several times each day. If this is not the case they may lose their opportunity in the opening position. It imposes large possibilities in a day traders suffer psychological distress arising from price changes from second to second. You've opened a real account or real account is running out I mean. On a real account, psychological point holds great importance far outweighs any pressure.
Other flaws are in excess of a day trader, namely the degree of activeness. The more active a person opens a position then the risk is also higher. So instead of getting profit, a day trader who is not adept at reading charts frequently experienced loss in large enough quantities in a short time.
Scalper
Scalping comes from the United Kingdom (scalp) which means it was fleas jump. Well with this type of scalping trading is indeed more or less adhered to this doctrine. Without downgrading the Scalper intends world, they often take advantage of the situation of price movement is very small and there was no means for a Swinger. For them, profits 10-15 points a day is already quite important is the stablitasnya.
The intent of this by taking advantage of that, as small as the Scalper holds that it is a lot easier than chasing gains 100 points in a single trading. Often they also take the number of lots that are a lot more for one opening position compared to most traders. If with a capital of $ 2000 a Swinger open lot 2 lot just as much in one transaction, the Scalper can open the position up to 5 times! What if there is a margin call? Well point margin call it for them is their Stop Loss point! But rather when profit by 10 points they earn, just imagine 10 x 5 = 50 lots. Just not with a day trader? But this time it's a lot easier because only targeted 10 points only. Not to mention due to only target profit 10 points, they can open a position many times to tens of times a day. Hmm ... how active they are!
A scalper usually use a time frame of 1 h and 5 m in their trading. 1 h is useful to determine the major trends that are happening while the 5 m is used as a determinant of execution.
O Yes, for a scalper, spread extremely important role for them. The scalper often look for brokers with a very small spread. The smaller will be the better because of their 1-2 points difference alone is very important. That's why they usually trade on the outside brokers such as GAIN Capital (not a promotion lho hehehehe).
Advantages of trading with a model like this is easy it is We get the profit that we pursue. The movement of 10 points is even when the market is being very-very quiet and the exchanges of London and Newyork is closed! The liveliness of our opening position is also certainly a lot bigger than a Day Trader let alone a Swinger. The included capital also need not be large at all. $ 1000 is already more than enough. Even the $ 500 was not the problem.
The Drawback? There Are. The main problem is determining a Stop Loss point be taken. With the profit target only 10 points and if we want to that balanced the SL we must equal the amount that is 10 points. But the problem is the same as the target 10 points can be achieved easily then the Stop Loss limit of 10 points were no less easy.
If so what if we set the SL by 30 points? Wouldn't it be easier to reach a profit while the SL became much looser? Correct. However Your profit in 3 x 1 x loss just everything is break-even.
Well if Scalping without SL how? It is also no less difficult. It would be far easier to achieve profit. But just imagine you have to wait days for Your terfloating position negative but your profit when you only take 10 Points only! Isn't that weird? The risk that We are liable to Margin Call level where almost all the funds We lost but we take advantage just 10 points! It really doesn't make sense
OK it is a variety of trading methods used by traders in the world. It should be understood here that there is no single method of trading which has been mentioned above, it is better than other methods. Each method has its own successful people who have tried that method for years. But there's also just the losers thereby.
The key here is to find the right method of trading for yourself. Try to ask yourself how much time and capital do you have? Whether you are a busy in everyday work? If Yes, then join the Swingers. Or if you're happy with an adventure, join the Scalpers. There is no problem at all. As long as it suits your personality then it would be really useful.
That needs to be emphasized here is the use of multiple time frame will greatly help you in determine the conditions that are going on in the market. A simple key in determining the time frame are: smaller time frame will always obey the larger time frame. It's important for you to understand. If you find Your H1 chart showing the direction is down and reverse the direction you pointed out riding the D1 then it is good to wait until both are unidirectional. Or if You were forced to open a position then follow the larger time frame! Because in a matter of a few hours in the future prices will indeed go down but in a matter of days the prices will keep going up and up!
Well how? This ends Our technical lessons. At the next session you will learn the so-called Fundamental Analysts. And don't forget to keep practicing the demo account. See you in the next article.
No comments:
Post a Comment