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9 Tips for Short-Term Forex Trading Strategies In 2020

Despite many people entering the Forex market with the idea to become millionaires, it is harder than merely opening and closing trades. Just a number: it is known that over 90% of traders lose money in the first six months.

Despite many people entering the Forex market with the idea to become millionaires, it is harder than merely opening and closing trades. Just a number: it is known that over 90% of traders lose money in the first six months.

However, with the right combination of effort, study, and advice, you can avoid the guillotine and become a successful Forex trader. In this article, we will take you into the best tips and tricks for short-term forex trading.

Because, as American singer Kenny Rogers said in his song The Gambler, “If you’re gonna play the game, boy you gotta learn to play it right.”

What is Short-Term Forex Trading or Day Trading?

Also known as day trading, short term trading is a popular investing technique that involves trades and positions opened and closed over a short period of time, usually within the same day.

Most traders consider it very attractive due to the profitability associated with the practice. However, it can also be dangerous as it often encompasses poor risk management and exposure to swings and high volatility.

It provides relatively smaller gains per position but has a higher frequency of trades. In the end, it produces a solid amount of pips every day.

Should you choose short term forex trading or long-term forex trading? There is no single answer to that question as it is all about your trading skills, your psychology, and the money associate to your trading account.

Long term vs Short term in price chart

Best Forex Trading Tips and Tricks

In the investment market, it all depends on your trading style and your personality. However, most of the best short-term forex trading tips and tricks will be related to tools that will help you stay in control of your position and, therefore, portfolio.

Here is a list of the ultimate forex tips, tricks, and advice that can help in your trading performance.

1. Know yourself and the kind of trader that you are

Knowing yourself can be seen as an obvious task, but it is not. As every market is different, so is every trader. You have your own personality, emotional reactions, and goals.

Some traders are more comfortable with low-risk positions like a safety net, but others like the adrenaline of betting against the market. Who are you? If you are the kind of person that likes to follow people and leaders, perhaps you would like to be a trend trader.

On the other hand, if you are a kind of renegade person who always looks for a different approach, a hidden agenda, or the round pegs in the square holes. Then, you would fit better as a contrarian trader. Then keep that on your mind when developing your skills.

2. Choose the best trading platform for you

There are thousands of brokers in the industry, and each one is different from the other. Some brokers are better for beginner traders, and others are excellent choices for experienced investors.

Do you want automated trading? Do you prefer being extra protected in terms of regulation? Or do you like to trade on the go with mobile apps? Ask and serve yourself accordingly.

Every broker has its own solutions, fees, base currencies, and deposit and withdrawal processing times. The best option to check is to watch for broker comparison tables and after selecting one, opening a demo account to test all of the brokers’ features.

Forex demo account

3. Get experienced in more than one trading strategy

Mastering the Forex market should be your premise when starting your investment career. You should learn more than one trading strategy that fits your trading skills and styles.

In that way, you will see the market with a more holistic approach. This does not mean you will use hundreds of technical indicators, which is not recommended. But it can help you if you have different strategies to choose the best trading plan at every moment.

4.Start with a telescope and finish with a microscope

It will help your trading performance if you know what the current tone of the market is. For that, it is good to start your analysis from the bigger timeframe such as weekly or daily charts, and then go into shorter time frames such as 1 hour, 15 minutes, etc.

In this way, you will understand the whole trend and the direction the market is moving. Then, you will be able to identify potential short-term opportunities in market situations such as support and resistances, overbought or oversold conditions, or when it is not a good idea to go short or long.

Remember, the trend is your friend, even if you are a contrarian trader.

5. Check correlations

Correlations are a powerful tool to confirm trades but also to potentially double profits. Use currency correlations to your advantage and to evaluate the risks and profitability of traders.

Statistical correlation talks about the relationship between two assets. It could be positive, but also negative. It means that when it is positive, one asset tends to mimic the other, for example, the euro and the Swiss franc. On the other hand, when it comes to talking about negative correlation, one security goes the opposite of another.

Positively correlated pairs are EUR/USD, GBP/USD, and AUD/USD. Negatively correlated pairs are EUR/USD against USD/CHF or USD/JPY.

Long story short, you buy gold and also sell the DXY if the greenback is trading down. For instance, when you go long EUR/USD, it is natural to go short on USD/CHF.

Forex correlations chart

6. Make a trading plan

Trading plans are the roadmap you will follow when starting your position. It should contain entry and exit points, stop loss, profit-taking, and risk/reward ratio.

The plan will keep the information about how much you are buying or selling, your potential profits, the levels to watch, and finally, it provides you with an exit point in case everything goes wrong.

Having a trading plan is one of the top items here in this list of Forex trading tips, as it will keep you in line with your objectives. But also, you should understand that the Forex trick is that you should follow your plan.

7. Protect yourself, manage your risk

Protecting yourself and your money is one of the cornerstones in your trading life. Remember that the market will open tomorrow, be sure your portfolio will be there too.

It is essential to calculate the risk associated with every trade and know when to wait and when to start trading. The market provides opportunities every single day, do not rush!

Finally, understand that it is better to stop trading when you are having a streak of losing days and take some days off. It will clear your mind, and you will return to the market with a sharp brain. Last but not least, never trade without stop losses and limit your risks.

8. Trade with facts, not emotions

This may sound basic, but it is not. Trade what you see, not what you hope to see. Wait for the right moment and keep your emotions out of the deal. I know that this is hard but understand yourself and learn how to deal with you.

Two intelligent Forex trading tricks are to maintain a clear trading plan and keep a detailed trading journal.

Multiple tests of supportive moving average in a trend

9. Keep learning Forex and be on top of new technologies

As Isaac Newton once said, “what we know is a drop, what we don’t know is an ocean.” The Forex market is one of the most challenging enterprises globally, but also, one of the most potentially rewarding.

Forex is hard because it changes every day at every second. What used to work in the past is not going to necessarily work now. It is imperative to keep studying and testing the market with new strategies, research, and both technical and fundamental topics.

Keep an eye on technology and use it for your advantage. Try back-testing software, automated trading, and technical indicators to enhance your trading and research.

Finally, keep a good internet connection that sustains your platform any time you want to use it.

Final Thoughts

According to a 14-year research on the Taiwanese stock market by the University of California and the Peking University, over 75% of participants quit after two years, and 90% of individual traders left the investment world after four years.

The study also showed that investors engaged in more traders after profitable periods due to overconfidence, and finally, they got burned.

This is why it is so essential to govern yourself accordingly and take the market seriously. Following these nine short term forex trading tips and tricks, you will have reliable tools to become not only a trader but a successful and profitable one.

At the end of the day, it all depends on you and how you deal with yourself. Keep your trading in shape with regular study, research, and testing. And win big!

Short-term Forex Trading FAQs

What is the Easiest Forex Strategy?

The easiest forex strategy is the one that fits naturally with your trading skills. More people love support and resistance, but it is all about you and how you like to trade.

What is the Most Profitable Forex Strategy?

That depends. All forex techniques are profitable, and potentially the most profitable forex strategy can be whichever. The secret is that you trade what you feel and fit with your trading skills and style. The money will come naturally.

How Can I Get Better at Forex Trading?

The answer is one: training. Forex evolves every day, so to get better at forex trading you should keep studying, learning new things, and testing different strategies. And finally, trade what you see, not what you hope to see.

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NinjaTrader Review 2020: Pros, Cons, Fees & More • Benzinga

If you’re on the hunt for the best online brokerage, Ninja Trader is a great fit for both new investors and seasoned traders. Some of the key features in NinjaTrader’s futures brokerage service include:

If you’re on the hunt for the best online brokerage, Ninja Trader is a great fit for both new investors and seasoned traders. Some of the key features in NinjaTrader’s futures brokerage service include:

  • Commissions as low as $.09 per Micro contract
  • Low $400 account minimum
  • Low day trading margins of $500 per contract for E-mini S&P 500 (ES), Nasdaq (NQ) and Dow Jones Industrial Average (YM) stock index futures contracts
  • $1,000 margins for Gold (GC) and Crude Oil (CL) futures contracts
  • Free version of NinjaTrader platform included with all brokerage accounts
  • Three platform license levels with varying feature sets and commission rates

In addition, the broker offers competitive spreads and a high-speed execution service for forex currency pairs.  

Who’s NinjaTrader For?

Futures Traders

NinjaTrader’s brokerage services cater directly to futures traders. It’s the ideal destination for those both active and new, with unlimited free use for advanced charting, market analysis, and simulation trading.

Advanced Traders

NinjaTrader’s state-of-the-art trading platform has a variety of features available across three license levels that allow traders to select the best fit for their trading approach. There are two upgrade feature sets available, Trader + and Order Flow +.

While advanced charting, market analysis, and simulated trading are included free for all users, licensing Trader + or Order Flow + gives you access to premium tools such as an enhanced SuperDOM, an advanced alerting system, semi-automated order execution, volumetric bars, and other sophisticated charting systems.

Active Traders

With commission among the lowest in the industry, traders can keep their costs low on a per contract basis. NinjaTrader’s low margins are also a great fit for active traders. With numerous technical analysis tools available, the trading platform can help users target opportunities and manage execution in volatile markets.

NinjaTrader has their flagship advanced trading platform for Windows-based desktop computers. Other third-party platforms are supported and available by request. If you are a Mac user, you can run the software using a multi-boot utility like Apple Boot Camp.

Source: https://ninjatrader.com/

NinjaTrader features a wide range of technical analysis functions that can be useful for those starting out with demo trading — especially if you want to learn how to trade futures.

The broker uses CQG (Continuum) for order routing by default but also supports order execution through Rithmic. Kinetick is also available as a free end of day market data source for stock, futures and forex data optimized exclusively for use with NinjaTrader’s platform.

If you’re interested in trying out the NinjaTrader platform using futures data, you can register to get a free two-week trial.

A free version of the NinjaTrader platform is included with all funded brokerage accounts and has all the core features needed for live trading, with access to charts, market analysis, and simulated trading.

If you want to access some of its more advanced capabilities, you can either lease the software starting at a quarterly basis or purchase a Lifetime license, which includes free upgrades for life.

The advanced tool sets are where NinjaTrader really shines. For example, sophisticated order types known as automated trade management (ATM) strategies are included in the Trader + feature suite. These consist of a set of specific rules you create to manage a group of stop-loss and profit target orders to operate on all or part of an open position.

NinjaTrader’s third-party developer community, known as NinjaTrader Ecosystem, features thousands of third-party apps and add-ons you can use with its trading platform. From their website, you can use the keyword search and filters to scan hundreds of custom tools and trading indicators built to work with NinjaTrader.

If you have programming skills, you can build compatible software within its advanced C# based development environment.

The NinjaTrader platform provides a high-performance backtesting engine which allows users to test and verify futures trading strategies using historical data. A wide range of useful educational materials are available if you’re unfamiliar with its platform and wat to enhance your skills.

These include daily training webinars designed to educate new users on the powerful tools available, hundreds of on-demand training videos, help guides, and an informative YouTube channel.

[youtube https://www.youtube.com/watch?v=bg4ocBoYrjM]

NinjaTrader’s Commission and Fees

Commission and margin requirements are among the lowest in the industry. A $1,000 minimum initial deposit is required to fund a new account and commissions go as low as $.09 per Micro contract with a Lifetime license. Day trading margins of $500 for ES, NQ and YM contracts, and $400 for GC and CL contracts are also very low.

When it comes to platform fees, the broker’s advanced platform and live data are available free of charge for use in a demo account. For live trading, you can use their free platform with all the basic essentials or choose a paid license level for more advanced features and lower commissions.

If you lease or buy a Lifetime license for the trading platform software, you also gain access to a suite of premium features that include its advanced trading management (ATM) strategic order handling. Traders who purchase a lifetime license also get the Order Flow feature set which comes with free platform upgrades for life.

NinjaTrader’s Security

NinjaTrader is well-regulated in the United States by the National Futures Association and the Commodity Futures Trading Commission (CFTC).

NinjaTrader’s Customer Support

NinjaTrader’s online support team excels in prompt replies with inquiries addressed within 15 minutes during market hours. An active user community interacts directly with the NinjaTrader support team in their User Forum. They also host daily live training webinars, have hundreds of on-demand training videos, and more.

NinjaTrader can be reached by email, phone, and an online support form for customer service. For critical trade issues, NinjaTrader provides direct phone support for brokerage clients. International traders are also directly supported with dedicated Spanish, Russian and German brokerage service teams. 

NinjaTrader’s Tradable Asset Classes

NinjaTrader brokerage offers a basic range of asset classes with a focus on futures trading on the CME, CBOT, NYBOT and Eurex exchanges. You can trade the following asset classes via NinjaTrader:

  • Futures 
  • Forex 
  • CFDs
  • Stocks*

*The platform can also be used through other supporting brokers such as TD Ameritrade or Interactive Brokers to trade stocks.

NinjaTrader’s Ease of Use

After downloading the NinjaTrader platform, it’s best to spend some time on the forum and watch the tutorial videos provided. It may take some time to set-up your ideal dashboard.

While NinjaTrader’s platform is exceptionally customizable and offers numerous advanced features, it may not be considered easy to use when you first download the platform.

Final Thoughts

NinjaTrader is one of the top brokers for futures and forex trading. The unlimited use of its free platform is a great way to get acclimated to NinjaTrader before deciding to trade live.

The free platform is sufficient for new traders with more advanced tools available as need such as semi-automated execution. NinjaTrader’s low commissions and fees, free tools, and an active community forum will work to any trader’s advantage.

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‘Risk On’ Market Update 12/10/20 – Forextraders.com

Markets finished last week firmly in a ‘risk-on’ frame of mind. Stocks, commodities and non-USD currencies all moved into bullish territory in terms of technical indicators. The uncertainty which characterised September’s price moves made way for a more positive outlook in a wide range of asset groups.

Trading Risk Measurement

Markets finished last week firmly in a ‘risk-on’ frame of mind. Stocks, commodities and non-USD currencies all moved into bullish territory in terms of technical indicators. The uncertainty which characterised September’s price moves made way for a more positive outlook in a wide range of asset groups.

Market Update

Stocks – Market News

• Asian markets had a mixed start to the week. The Hong Kong Hang Seng equity index was up 2.29% on Monday, but the Japanese Nikkei 225 was down -0.17%.

The mixed messages from the Asian trading sessions carried into the European open. Asian traders were wise to the risk of following the buying patterns only to find European and American traders taking profits later in the day.

Metals – Market News

  • Price action in gold and silver hints that they could have started one of their breakout patterns. Fans of the metals will be familiar with how both can build momentum and click through price levels on the way to their next target price. The main issue is deciding on trade entry points.
  • As of Monday morning, the price of gold ($1925.22) is where it was on Friday afternoon. Support 1 is at $1921.98, Support 3 at $1917.87.
  • Such price consolidation is a characteristic of the metal and there’s nothing bearish about the indicators.
  • The Hourly SMA has provided support and could be the indicator to watch. The kiss of that line in the early hours of Monday marking the week-to-date low at 1921.66. Price support in that region was also provided by the 23.6% Fib.

Source: FXTM

Energy Commodities – Market News

  • Geo-political risk rather than technical indicators continue to guide the price of crude with Azerbaijan and Armenia engaging in a will-they won’t-they military stand-off.
  • It’s hard to get a clear picture of how political uncertainty will impact price. Still, the increased volatility and price increase of 6.84% last week will be a tempting proposition for many.

Trade of the Week

Last week has been firmly signed off as a successful opportunity to ‘buy-the-dips’. Our desk put on a buy of the US 500 stock index one hour before the European stock markets opened on Monday the 5th of October. With an opening price of 3367.28, it caught the pre-market exuberance and was mostly in positive territory throughout the week. Only trading underwater in the overnight trading of Tuesday evening and Wednesday morning.

Source: IG

In the morning session on Monday the 12th, the total percentage return on the US 500 position is +3.74%. The two-unit purchase trade, put on using IG, generating a profit in cash terms of £244.72 in the space of one week.

Source: IG

The obvious question to ask is whether there is any juice left in the move towards risk. The countdown to the US presidential election has started in earnest. With 22 days until votes are cast, those looking for this week’s trade might have less conviction than the position our desk put on last Monday.

Gold’s role as a defensive asset is not as strong as some would suggest. It’s hard though to look past the metal’s price action, dollar weakness, and the chance that it be seen as some kind of security as the election nears.

A position in gold could be a useful marker. Our buy-in small size for $1923.15 is one for the Demo Account, but it should help keep track of the markets.

Our analysis is based on a comprehensive summary of market data. We use a range of metrics with weighting given to simple and exponential moving averages and key technical indicators.

Any information contained on this Website is provided as general market information for educational and entertainment purposes only and does not constitute investment advice. The Website should not be relied upon as a substitute for extensive independent market research before making your actual trading decisions. Opinions, market data, recommendations or any other content is subject to change at any time without notice. ForexTraders will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

PAST PERFORMANCE IS NOT ALWAYS INDICATIVE OF FUTURE RESULTS.

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Learn with ForexTB: The battle of the currencies!

What is currency trading?How do currency pairs work?What currency pair is the most popular to trade and why? A few of the most common questions concerning traders when it comes to currency trading!Well, we’ve got all the answers, but first let’s start with some simple explanations and, as we go along, we’ll cover everything around…

An introductory guide to forex trading

What is
currency trading?
How do currency pairs work?
What currency pair is the most popular to trade and why?

A few of
the most common questions concerning traders when it comes to currency trading!
Well, we’ve got all the answers, but first let’s start with some simple explanations
and, as we go along, we’ll cover everything around the currency market.  

Forex trading
(aka. Foreign exchange, duh!), is all
about buying and selling currencies in pairs
. All you need to know is how
much the currency pair is worth. However, it’s not that simple, as these
currency pairs do not always deliver the desirable results to traders.

Before we dive into the trading currency
pairs, let’s see some of the most popular currencies out there. These are:

  1. US Dollar (USD)
  2. Euro (EURO)
  3. British Pound (GBP)
  4. Australian Dollar (AUD)
  5. Canadian Dollar (CAD)
  6. Swiss Franc (CHF)
  7. Japanese Yen (JPY)

Now, let’s see how they look in
pairs according to the category they fit in.
Currency pairs are divided into three categories. The “Majors“, the “Crosses” and
the “Exotics“, each with its own
characteristics.

1. The “Majors”
These currency pairs are always paired
with the U.S dollar
, with EUR/USD
being at the top of the currency pairs table as the most traded currency pair
in the market
. These are:

FXTB2

So why is the EUR/USD pair the most popular and traded pair ever?
Because both currencies represent two of
the biggest economies in the world!
Thus, trading this pair will result to
having tight spreads. And YES, this is a good thing because the lower the
spread is, the lower the fees you pay when you enter a trade.

2. The “Crosses”
These currency pairs do not involve the
U.S Dollar
.

These include and not limited to:

FXTB3

3. The “Exotics” *
These currency pairs include one major
currency
, this being the US Dollar, and one currency from a developing market. Some examples of exotic
currency pairs are:

FXTB4

Something
to note in this category: Exotics tend to be “trickier” in terms of price
fluctuation, due to economic factors. For example: A political result or
scandal in Mexico can cause the USD/MXN price to change unexpectedly!
Therefore… Trade at your own risk, if you’re about to trade with these pairs
(well, you should always be careful when trading)!

So, as we’re approaching to the
end of this useful educational article, it
is advised for less experienced traders, NOT TO trade with multiple currency
pairs simultaneously
! We recommend that you make yourself comfortable whilst trading on a demo account, as this
will make you gain confidence and at the same time potentially achieve better
results! Well, we can’t guarantee that, but you get the gist. Once you’ve mastered currencies, you can
slowly expand you trading abilities and start trading with new currency pairs!

Don’t you agree?

This article was submitted by ForexTB.
For bank trade ideas, check out eFX Plus

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