Active traders must agree with me that the day trading is not easy, especially when your life depends on your profit in the trade. Some surviving tips for you to add to your trading tool box are the following:
Following the Trend: This strategy is used by most of the business firms and individuals. It is assumed that the foreign exchange market and of securities which have been rising steadily will continue to rise. Then seek to enter the market on what Fibonacci traders call Retracements or Pull Backs / Corrections. When a trader who is a trend follower discovers or realizes the market Trend is just waiting for the price of two correct or greatly reduced and then binds to the Secondary Trend before it resumes its maps program of motion. Trend traders assume there are three types of trend in any market; the Primary or Major Trend, Secondary Trend and the Minor or counter Trend. The primary Trend is the Main Trend of the day or week or month, depending on which time frame a trader decides to trade and of what he considers his BIG picture of the market, while the Secondary Trend is the resumption of the Main Trend after the market has ended its Retracement or Pull-Back. The Minor Trend is movement in a direction that denies the above, then, falling prices become a minor trend and most times do not last as long as the main trend. Very often, we can observe that the lower the tendency to fluctuate between the 50% and 61.8% of the previous movement of the main trend before the correction ends.
Playing News: This strategy is to buy or sell a currency or security of a country that has just announced good news for the economy. An example is what happened during the third week of February 2009. president Obama’s fiscal Stimulus bill hate been passed by Congress. The news of this event made waves during the weekend that gift of birth to the third week and the week witnessed the US Dollar recording multiple week highs against all the major currencies around the world during three consecutive days. It should be noted that the markets simply moved against all technical forecast because of the information along with other fundamental news that was not favourable to the Pound Sterling and the EURO. The following sites are places where you can get news of http://www.forexnews.com etc A great strategy that you can learn to profitably apply to the news when trading the news is straddling. This allows you to open buy stop and sell stop orders minutes before a crucial news event.
Range Trading: with this strategy a trader seeks to buy when the market ranges into the oversell area at a Support Level and sells in the range again when the market has varied in overbought at a Resistance Level. Hedgers also use this when you are not sure of what the market is two.
Scalping: it is commonly defined as a very fast way to trade. A scalper may simply operate on either 1 Minute or 5 Minutes in the Time Frame in which it takes only about 5 to 10 pips pips per trade and enter 50 trades per trading day. The use of multiple and large lot sizes can make this strategy very rewarding as well as risky.