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. 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 fruit mangosteen.
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.
