Despite the widespread use of tools, both fundamental and technical, there are still many factors affecting income generation. And these factors depend on the strategy that the trader chooses. The choice of the optimal strategy that will correspond to the character, emotionality, personal convictions, abilities and knowledge of the player – is the key to profit.
For beginners who are not yet confident in themselves, are limited in opportunities, and therefore quickly try to withdraw capital at the slightest income, or for those who do not like to risk, and therefore play on the number of transactions, and not on a distant strategy , short-term Forex trading will do.
Short-term trading is a type of trading where transactions can be opened and closed many times during the trading day. Like all strategies, it has advantages and disadvantages.
- The set of transactions in one day is confusing, especially when it is not fully possible to analyze the behavior of one or another currency pair. The quick opening and closing of a transaction with the minimum withdrawal of profit allows you to test trading systems. It plays into the hands of the fact that the nature of price changes in the short-term period is the same even for a minute segment, even for an hour;
- intraday trading is more dynamic, that is, it requires more attentiveness, activity, which is an excellent school for beginners;
- risk minimization. Transactions are conducted with a small deposit, and therefore both profits and losses are insignificant.
It is difficult to call such a strategy profitable. Rather, the purpose of its application is to learn how to use certain tools on the Forex market, to understand the principle of the trader’s work, to learn to follow the fluctuations of currency pairs, understanding the reasons for this, and most importantly, to learn self-control. After losing, we often lose our heads, and it is precisely self-control, the ability to restrain emotions and think reasonably will help to get a much more significant income in long-term strategies.
- the need to get used to the sessions. If in the long run you can become attached to one exchange, then in the short-term you need to know the schedule of trading sessions: American traders and European traders are active during the day, Asian ones are active at night;
- the need to follow the news on the weekend, during which events that affect the course may occur, which turns a one-day strategy, a three-day one;
- the need to track news according to a fundamental analysis. Some indexes are published on Friday and, based on them, currency rates can change dramatically. The short-term strategy does not imply a deep analysis of macroeconomic indicators, but in this case it is an important influencing factor.
Short term is easy to use. No need to analyze the markets, view long-term historical trends and calculate the waves. It is situational in nature, but knowing its basics, you can try to gradually enter the longer-term market of transactions, and this is the way to make more profit, and therefore to new achievements and self-development.