Day trading is one of the most popular trading strategies for those who have the necessary skills and knowledge about the market.
It’s pretty famous for its simplicity in theory: you open a trade at the HQBroker Forex Bonus start of the market, then you see how it goes, and then close it at the same day before the sun sets.
However, it also goes beyond just that. Day trading requires much effort from someone who chooses it as his or her trading tactic. Therefore, it’s not very simple.
More importantly, there are different ways FX Bonus in which you can perform day trading. Day trading has types, and the more you know about each of them, the better you can at you chosen style.
In this article, we’ll tackle some of the most popular and most effective types of day trading. Read on!
When you do trend trading, you look at a longer time frame chart. You do that because you want to know the bigger picture—the overall trend of the price movement.
After you’ve determined the overall trend, you then focus on a smaller time frame chart and see if you can find trading opportunities following the direction of the trend you have just spotted.
The great benefit of using time frame charts is that it can give you a clue on your trading entries. By studying such charts, you can predict the next ideal trading entry along the overall trend direction.
The kind of analysis that is used in this kind of trading is called multiple time frame analysis.
As the name implies, countertrend trading will also require you to determine the overall trend. The difference is that you’ll have to trade or find trading opportunities toward the opposite direction of the trend.
The idea behind this tactic is to spot where or when the trend will end and become the first one to jump in the ship when the trend finally reverses. As you may probably think, this strategy is a little riskier than trend trading, but it can definitely give you huge rewards if you do it correctly.
In forex, when you do breakout trading, you try to look at the range that a currency pair has made during specific times of the day. Afterwards, you place trades on both of the currencies in that pair. Your main goal is to catch a breakout in either direction.
Most of the time, breakout trading is very effective when a currency pair has stayed in tight range. This is because the tightness in the range is typically a signal that the currency pair will soon make a big move.
The idea is to set yourself up before the big move, so that when it happens, you can easily catch the wave.
When you use this strategy, you have determine the range in which the support and resistance have held strongly. After you spot that range, you can place entry points above the resistance level and below the support level.
In general, you have to aim for the same amount of pips, which will make up your set range.
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