Day Trading Versus Long Term Trading – Find Out Which Wins

Trends rule in the Forex market. Every trader loves a good, strong trend. As traders, many of us like to make quick profits. Who does not? The problem is that by just focusing on making quick profits, we often overlook a much more profitable strategy which is the long-term trend.

First let's discuss the anatomy of a short-term trade. A short term trade can last anywhere from less than a minute to about 20 minutes, if you get really lucky. A 20 minute trade should return huge profits. Those are the uncommon trades and the 1 to 5 minute trade are more common when day trading. As a trader, you must make a split second decision of whether to enter a short term trade.

A savvy trader will set both exit points, profit and stop-loss, when entering a short term trade. Most traders, however, set a stop loss, but do not set a goal for their profit leaving the exit at their discretion and, often, to luck. If you do short term trading, set your exit points before entering the trade. You can always adjust them as the trade progresses, but you will be protecting yourself against sudden reversals and changes of market sentiment.

Long-term trading in Forex is often overlooked and even frowned upon by many traders. For one reason or another the belief among most Forex traders is that most money is made scalping the market and that holding positions overnight is not a good strategy. Well … That assumption is wrong. The Forex market is very much like the stock market in that aspect and those that trade the long term charts, whether you use a day or weekly chart, have a better chance of making unbelievable gains.

The reason for it is that, except for exceptional events, currencies make their big gains and losses over longer periods of time and not in a 30 minute time span. If you take a look at the long chart of any currency pair, you will see that, had you traded the long term chart, you would maximize your profits. That is because instead of just making small one day gains on a currency that is trending, you would ride the trend for several days, weeks, and, sometimes, even months. I ask, where do you see the opportunity for bigger profits?

I agree, the long term chart offers a better chance to maximize your profits, but it takes discipline and reconditioning your mindset to stay in a trade for a much longer period of time.



Source by Luis Nieves

Learn Day Trading

The Fast Way for Anyone to Learn Day Trading

Anyone can learn day trading techniques, even if you're starting out with zero trading experience.

Since popular belief, you do not need to concern yourself with understanding difficult and confusing indicators, candlesticks of stock chart patterns. When just starting out, you are best to choose one (and only one) system to trade. Make sure you select a very clear and basic strategy. Your changed system should have clearly defined entry and exit signals. This eliminates any need for "guessing" – and therefore error.

As a beginner, I thought that in order to learn day trading, I had to back-test and research chart patterns and price movements. With hindsight, I believe I was wasting my time. No matter how hard I searched, I was never going to find the "holy grail". All I needed was a simple system that worked – and then to train myself to be consistent enough to obey the system's rules.

Today I use a very clearly defined, easy to use system. You'll be pleased to know that a large number of traders using this strategy are actually complete beginners … but still find great success. By practicing a simple entry / exit strategy, everyone from stay at home parents, students and retirees have been able to learn day trading with my favorite system.

You can discover this powerful system for yourself as it is taught by video or DVD. Once you have the basic knowledge, you can then spend one or two months paper-trading to master the system and see the amazing results for yourself.

If you really like the idea of ​​a stay at home job that makes great money, then day trading could be for you. Take some baby steps in the right direction and get yourself a very simple system you can start using today.

I hope this has helped you on your quest to learn day trading .



Source by Shona Lynch