Forex Analysis part 2
Swingers often use the daily time frame or 4h to determine their long-term trends. For decision Buy or Sell, usually they just use the graph 1h only. The point is this: when they want to find the right moment to open a position then they will open their 1D or 4H chart. Then they determine what trends are going on when on the 1D chart. If the trend shows the situation by heading uptrend then they will only seek Buy position and will not open a sell position at all. Next they will find the right time to open a position. The trick is to wait for the H1 chart to be in the same direction as D1. This means that if D1 shows the upward direction then the Swinger will wait for the time when H1 also shows upward direction. After that Buy position was done. When they enter then usually they will determine how their target profit. The average trader with this type will pursue profit targets above 100 points so it takes several days to several weeks to reach them. Another thing to note is that the Swinger is not even reluctant to do counter action trend just to take the opening position. For example when the price has reached the saturated region (say Overbought) then they are not afraid to take a position Sell although the rising trend is not over. Their assumption is to save time because they mostly do not like to monitor their charts constantly. That is why they have substantial capital to withstand such price movements with the assumption that soon the price will move down even though it is still on the ascending trend.
The advantages of trading with a model like this is first in the relatively easy analysis. Keep in mind that the greater the time frame we use the easier it will be for us to predict price movements. Conversely, the smaller the time frame used it will be more difficult for us to predict the movement correctly. This is because with smaller time frames the graph is often more jagged (whipsaw) making it difficult to read the main trend.
Another convenience is on the side of psychological pressure. Because the Swingers use a fairly large time frame then usually they do not need to monitor the movement of the chart every hour or every minute. Just once a day does not matter. As a result they will be more psychologically comfortable and avoid the market pressure in every movement. Well happier life, is not it? And for the same reason they can usually perform their daily activities in addition to trading well.
The drawback? Of course there is! The most fundamental deficiency in trading with Swing patterns like this is in capital problems. You can not make Swing trading for only $ 500! Because the Stop Loss are worn long enough then usually they need a lot of capital for not bertrading. At least $ 2000. That too was very minimal once. Not to mention if they play is not enough with just 1 lot for a one-time opening position, then the included capital can reach several times from $ 4000 even up to tens of thousands of dollars. The second issue in swing trading is there on the occasion. Often these Swingers can not open positions while other traders like Day Trader or Scalper can make a profit on existing moves. The reason is the opportunity for the Swinger is much less than other types of traders. That's because they have to wait for prices to be at both extreme points to open positions. When the price is playing in the median line (midline) then they can not do anything but wait. Boring job!
Day Trader is a trader with a daily model. Usually this type of trader will open his position and close the same day. The longest in just a few days and very rarely pass the week running. That is to say as much as possible they will close their positions before the beginning of the next week begins. So if they open a position on Thursday then before Saturday morning they will close their positions because they do not like waiting until Monday where new patterns and trends are happening.
The advantages of trading with a model like this is first in the relatively easy analysis. Keep in mind that the greater the time frame we use the easier it will be for us to predict price movements. Conversely, the smaller the time frame used it will be more difficult for us to predict the movement correctly. This is because with smaller time frames the graph is often more jagged (whipsaw) making it difficult to read the main trend.
Another convenience is on the side of psychological pressure. Because the Swingers use a fairly large time frame then usually they do not need to monitor the movement of the chart every hour or every minute. Just once a day does not matter. As a result they will be more psychologically comfortable and avoid the market pressure in every movement. Well happier life, is not it? And for the same reason they can usually perform their daily activities in addition to trading well.
The drawback? Of course there is! The most fundamental deficiency in trading with Swing patterns like this is in capital problems. You can not make Swing trading for only $ 500! Because the Stop Loss are worn long enough then usually they need a lot of capital for not bertrading. At least $ 2000. That too was very minimal once. Not to mention if they play is not enough with just 1 lot for a one-time opening position, then the included capital can reach several times from $ 4000 even up to tens of thousands of dollars. The second issue in swing trading is there on the occasion. Often these Swingers can not open positions while other traders like Day Trader or Scalper can make a profit on existing moves. The reason is the opportunity for the Swinger is much less than other types of traders. That's because they have to wait for prices to be at both extreme points to open positions. When the price is playing in the median line (midline) then they can not do anything but wait. Boring job!
Day Trader is a trader with a daily model. Usually this type of trader will open his position and close the same day. The longest in just a few days and very rarely pass the week running. That is to say as much as possible they will close their positions before the beginning of the next week begins. So if they open a position on Thursday then before Saturday morning they will close their positions because they do not like waiting until Monday where new patterns and trends are happening.
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