For many, short-term Forex trading is simply referred to as day trading. This happens when a trader aims to open and close positions on the same day, with positions held just for a few hours at most. Some traders like to work on even tighter timeframes and trade with transaction times that vary from a few seconds to a few minutes – this is called scalping.
Going by the assumption that all short term Forex traders can be classified as either a day trader or a scalper, let’s give you some of the best tips for how they pursue success.
Invest in your computer setup
Your setup is super important. Invest in a good chair, a good computer, and even a pair of glasses if they might help. You’re going to need a lot of patience, attention, and tolerance for anxiety because many stressful events can take place while sat watching the screen all day. If your computer is slow, prone to freezing, or laggy, you might miss out on movements and get stung.
Get to know: Support and resistance
Perhaps the most popular day trading strategy of all time, support and resistance involves determining the support and resistance levels on a currency pair and identifying the opportunities that lay within. Once the S&R levels are spotted, trades can switch to small timeframes of 5 to 15 minutes (M5-M15) to place their orders. Courses targeted at Forex trading for beginners typically start with this strategy as a foundational basis.
Learn what kind of trader you are
You might think you know yourself pretty well, but do you know what kind of trader you are? Do you know how well you handle the pressure? How do you respond when you’re about to lose thousands? Every trader has a different personality, trading goal, emotional response, and level of risk adversity. Are you the kind of trader who plays it safe with low-risk moves, or are you a high-octane adrenaline-seeker who bets against the market or trades with leverage?
If you aren’t interested in developing your own style, you may end up as a trend trader or a copy trader, using tools that allow you to mimic others. However, if you do want to be different and stand out in the trading world, you may end up as a contrarian trader, someone who expects the unexpected and always seems ready for a shocking turn thanks to excellent technical analysis.
Get to know: Moving averages
The second most popular short term Forex trading strategy is moving averages, often abbreviated to MAs. These are indicators that help traders to plot and predict the direction of future price movement and suggest support and resistance levels. Predicting a future price movement is also known as a trend indicator, and it works on the theory that if a price is above the moving average, the trend will be bullish, and if the price is below the MA, the trend will be bearish.
We advise you to head to YouTube or find some online courses about moving averages, as you may find it to be a preferable strategy to support and resistance trading. A third choice that we should mention is candlestick patterns, though this is better for more experienced traders.
Choose the best trading platform for your needs
There are thousands of brokers and trading platforms out there, all with unique selling points and special offers to attract traders. Some are suitable for first-time traders, some are great for pros and day traders, and some offer simplified services to copy traders. If you want to get involved in short-term Forex trading, it’s ideal to look for a platform that offers the ability to view charts in minor time increments. Before committing to any platform, however, it’s important to take advantage of the demo account to see if the service is good for you.
Disclaimer: Investing money carries risk, do so at your own risk and we advise people to never invest more money than they can afford to lose and to seek professional advice before doing so.