When you are planning for a trade, the first step is to identify the type of trade into which you will enter. Do you want day trading, swing trading or positions trading? It all depends on your trading strategies. What matters most to a trader or an investor is how to create a positive cash flow.
Is it a day trade? Is it a swing trade or is it a long term positions trade? Once we acknowledge what our goals and objective are than we can narrow our expectations.
Suppose I am a day trader. I need to know what the daily range of the currency pair that I am planning to trade is to start with. I will expect that if I miss 20% of the bottom and 20% of the top then I can expect to capture 60% of the average daily range. I will generally be able to identify what the average range for the day is. My expectations are for X amount of a given range.
So how do I start? First I will have to structure my computer and charts to a format that is conducive to day trading. How many pips you want to make in a specific time frame like eight to six bars from entry? 30 pips or 40 pips!
Use the 15 minute time frame for the dominant trend if you trade Euro, Yen or Pound, then for day trading. Use the 5 minute time frame to exit a position in day trading. Use the 5 minute time frame as a shorter time frame trigger to go with the 15 minute signal.
The key to remember is when the 15 minute time period is in sell mode, take the 5 minute sell signals. Similarly when the 15 minute time period is in the buy mode, take the 5 minute buy signals.
If you are in a trade based on the 15 minute and the 5 minute time periods, these are the time frames you need to monitor for that specific trade. However as a day trader you can watch the 60 minute time period.
During day trading keep in mind your profit targets and where you are in range. Keeping an eye on the 60 minute time period will help you identify the current trend if a moving average crossover occurs and a potential change in the trend.
Suppose you are trading EUR/USD currency pair. Suppose the Euro is already down 50 pips when a sell signal is triggered, the odds are that your profit potential is in the range of suppose 30 pips or less if the average true range (ATR) is 80 pips based on the past 14 trading days. How do you calculate these things?
You will have to subscribe to a good forex charting service. Free forex charts do not go into very fine details that you need to look into when making your trading decisions. Using good forex charting software will help you automatically calculate all the daily, weekly, monthly pivot points as well as the daily range, support and resistance, S-1, R-1 and other stuff.
You should learn how to calculate pivot points. Using pivot points in day trading can give you an edge. For day trading use the 60 minute time period for calculating the monthly pivot points, 15 minutes time frame for calculating the weekly pivot points and the 5 minute time frame for calculating the daily pivot points. - 29970
Is it a day trade? Is it a swing trade or is it a long term positions trade? Once we acknowledge what our goals and objective are than we can narrow our expectations.
Suppose I am a day trader. I need to know what the daily range of the currency pair that I am planning to trade is to start with. I will expect that if I miss 20% of the bottom and 20% of the top then I can expect to capture 60% of the average daily range. I will generally be able to identify what the average range for the day is. My expectations are for X amount of a given range.
So how do I start? First I will have to structure my computer and charts to a format that is conducive to day trading. How many pips you want to make in a specific time frame like eight to six bars from entry? 30 pips or 40 pips!
Use the 15 minute time frame for the dominant trend if you trade Euro, Yen or Pound, then for day trading. Use the 5 minute time frame to exit a position in day trading. Use the 5 minute time frame as a shorter time frame trigger to go with the 15 minute signal.
The key to remember is when the 15 minute time period is in sell mode, take the 5 minute sell signals. Similarly when the 15 minute time period is in the buy mode, take the 5 minute buy signals.
If you are in a trade based on the 15 minute and the 5 minute time periods, these are the time frames you need to monitor for that specific trade. However as a day trader you can watch the 60 minute time period.
During day trading keep in mind your profit targets and where you are in range. Keeping an eye on the 60 minute time period will help you identify the current trend if a moving average crossover occurs and a potential change in the trend.
Suppose you are trading EUR/USD currency pair. Suppose the Euro is already down 50 pips when a sell signal is triggered, the odds are that your profit potential is in the range of suppose 30 pips or less if the average true range (ATR) is 80 pips based on the past 14 trading days. How do you calculate these things?
You will have to subscribe to a good forex charting service. Free forex charts do not go into very fine details that you need to look into when making your trading decisions. Using good forex charting software will help you automatically calculate all the daily, weekly, monthly pivot points as well as the daily range, support and resistance, S-1, R-1 and other stuff.
You should learn how to calculate pivot points. Using pivot points in day trading can give you an edge. For day trading use the 60 minute time period for calculating the monthly pivot points, 15 minutes time frame for calculating the weekly pivot points and the 5 minute time frame for calculating the daily pivot points. - 29970
About the Author:
Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading stocks and currencies. Try Strignano's Forex Signals free. Discover a revolutionary Forex Robot Trading System!
