Earn on short-term trading steaks: 4 important factors
I often hear from many traders that short-term trading is impossible, that this is market noise, and so on. But I can tell you from my experience-this is complete nonsense. In fact, if you open a chart of the movement of currency rates, and remove all the labels of timeframes from this chart, remove the markup, then You will not even understand what time interval is open.
The logic of movement of currency pairs is the same on all TF. Perhaps earlier, 50 years ago, in the stock market, when there was no Internet, computers, there was a different speed of information transfer, when orders were opened over the phone - this was the unpredictable market noise. Now everything has changed dramatically. Nevertheless, they have a number of features that we will discuss with you.
1. Output of macroeconomic statistics
Simply put, news. Everyone knows that there are news release calendars. I am only interested in the time of news release in this calendar, I do not take into account their indications. Once upon a time, at the beginning of my trading, I tried to build a profitable trading system on this basis.
I didn't succeed at the exit, and I don't know of any successful trader in the world who did. If someone has succeeded, please send me an email based on the statistics of several hundred transactions. I will be interested to talk to you.
Yes, you can often build such a system on demo versions, but in real trading, the broker simply will not have time to open a position for You in time, and will only open it where the price has moved several tens or even hundreds of points. So I only take into account the time of news release, and the main news, and not all in a row. Don't forget that news is also shared by countries of these currencies. All these news should be taken into account in order to be prepared for strong price spikes. Therefore, you need to:
or fix profit on transactions;
or withdraw orders if You haven't entered the market yet;
or move the stop, if possible.
The same applies to days when some countries have a holiday or holiday. This should also be taken into account when trading within the day, if you are trading on the GBP/USD pair, and it is now a holiday in the US or UK. This means that the trading volume is small. The market is very low-volatile and sluggish, it is almost impossible to earn money there.
But there are price hikes, which is also bad.
Because one relatively small transaction of some major player, which the market on a normal day simply will not notice, can greatly affect the market quotes, in addition, transactions on such days can be poorly handled by brokers. Therefore, you also need to be extremely careful here, ideally, you should skip trading on the corresponding instruments altogether.
3. Day of the week
The next factor to consider is the day of the week. Here, too, you need to understand that, for example, on Monday the market opens after the weekend, as a rule, there is a GAP, an intersessionary flat Forex can be formed.
On Friday, on the contrary, many traders fix deals, so the markets often turn around on Friday.
The pattern in these reversals is not worth looking for, but it is necessary to take this into account in trading. Moreover, I advise you to analyze the success of your trade on the days of the week on the large statistical data of your trade and exclude the day that brings the most losses, as they do in large investment companies that employ a certain pool of traders.
4. The schedule of trading sessions
What does keeping track of the session schedule give us? The strongest movements of currency pairs occur during the operation of specific exchanges in specific countries. That is, if you trade on EUR/USD, the strongest movements occur during the European and American sessions. Also, taking into account the schedule allows you to skip suspicious transactions at the end of trading sessions, which can lead an open position to a deep long flat, and often to a loss. That is, if I trade USD/CHF and at the end of trading sessions in Europe and the United States I see a signal to enter the market, then I will most likely miss this entry. I recommend studying technical analysis tools, such as the Ichimoku indicator.