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 eye where we trade. It is wise to trading with multiple time frame.
The use of various time frame will help us to determine 2 things namely:
long-term global Trend is going
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 of 1 hour or 15 minutes you show the trend is being lead to a downtrend then we open sell position. While in fact the trend in the long run shows prices are going through the Ascension. 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. Because in daily price trend indicates the direction of the ride then slowly position the 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 the 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 a 4 h (4 hours) or D1 (daily). Whereas to determine uptake position 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 with how your trading. Everyone has differing trading cycles. There is an open position and after days or even up to a month of the new position is closed (this is called a swing trader) or some are just within hours of its position already 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 like a more passive policy 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 is
those who decided the first way trading. The Swing trader tends to hold his position until berhar days up to several months. Some even hold his 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 number of the 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 of the movement in the last 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 decision making Buy or Sell, usually they simply use graph 1 h only. The meaning of this: at a time when they were about to find a fitting moment to open a position then they will open the chart 1 d or 4 h them. Then they determine whether a trend is happening when in graph 1 d. 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'll 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. This means that if D1 shows the direction up Swinger will wait time where H1 is also showing the direction of the Board. After that a Buy else done. When they entered the then usually they 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 that needs to be known 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 rising trend.
Advantages of trading with a model like this is there first on the relatively easier analysis. Keep in mind that the greater the time frame that we use then it will be easier for us to predict price movement. Instead the smaller time frame being used it will be increasingly difficult for us to predict the movement correctly. This is because with a smaller time frame charts 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 used the 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 day is not a problem. As a result they will be more comfortable psychologically and escape from the pressures of the market in each 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 good
. 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 also very minimal. Not to mention if they are playing is not enough with just 1 lot only for one 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 there on occasion. Often the Swinger it could not open position while the other type of trader as Day Trader or Scalper can profit on the menangguk movement. 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 is at the second extreme point to open position. When the price was playing at the mediannya (Central line) then they can't do anything other than wait. A tedious job!
Day Trader is a trader with models daily. 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 very rarely get through a week of walking. That is to say as much as possible they will close their positions before the beginning of the next week starts. So if they open the position Thursday, then before Saturday morning they'll close their positions because they don't like waiting until Monday where the pattern and the new trend is going on.
Well the Day Traders usually use time frame 4 h or 1 h 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 of the lot in one day when he entered initial deposit only $ 500!! It belongs to a very active day trader
. There are many benefits to be gained when someone did a day trader. It primarily is on a initial deposit is done. 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. Nevertheless it was 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 the capital could not be lied to. Do you guys agree with Pak a teacher kids?
Other benefits when you trade with a pattern day trader is on the multitude of opportunities that can 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 dizzying a long-term trend as a Swinger. This is due to their trading is today.
Deficiencies in trading with patterns like this there are of course. If at a Swinger benefits there are at ease in the control position dah price, it is thus becoming a day trader constraint. A day trader must be strong enough to monitor the price movement several times each day. If not they can lose their chances in the opening position. It imposes on the magnitude of the possibilities in a day traders are experiencing psychological distress arising from price changes from second to second. You've opened a real account or real account is running know what I mean. On a real account, psychological point holds a very important role far exceed 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 going to be getting bigger. 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 mean world, they often utilize a 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 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 tradenya. 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 just as much as 2 lots in one transaction, the Scalper can open the position up to 5 times! How 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. The same is not 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 up to a dozen times in one 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 used as the decisive 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 due to their difference in 1-2 points only very important meaning. That's why they used to trade on, 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 the 10 points can even be reached when the market is being very-very quiet and the exchanges of London and Newyork is currently closed! The liveliness of our opening position is also certainly a lot bigger than a Day Trader let alone a Swinger. Also included are capital need not be large at all. $ 1000 is already more than enough. Even $ 500 is not the issue.
The drawback? There are. The main problem is determining a Stop Loss point be taken. With the profit target only 10 points so if We want a balanced then SL we must be the same magnitude that is 10 points. But the problem is the same as the target of 10 points can be achieved easily then the Stop Loss limit of 10 points was not losing easy.
If so what if we set the SL by 30 points? Wouldn't it be so much easier to achieve a profit while the SL became much more loose? Correct. However Your profit in 3 x 1 x loss just everything was breakeven.
Well if Scalping without SL how? It is also no less difficult. Would indeed be far easier to achieve profit. But just imagine You have to wait for days on end because your position is negative but when you terfloating your profits only take 10 Points only! Isn't that weird? Our liability risk is up 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 none of the trading methods that have been mentioned above better than other methods. Each method has its own successful people who have tried that method for years. But there is 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. All of that fits with your personality then it would be really useful to.
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 vice versa D1 you show up direction is either to wait until both are unidirectional. Or if you are forced to open 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.
