If you are looking at short term trading strategies in forex trading you really have two methods you can use forex scalping or day trading and on the other hand swing trading but which is best? Let’s tak a look…
Day trading or scalping is a method where traders seek to take advantage of intra- day moves of a few hours and use support and resistance levels in this period to determine when to execute their trading signals.
The problem is it doesn’t work. You have countless millions of traders trading with different forex trading strategies and methods, all with different motivations and to say what this group of traders will do in such a short time span, is laughable.
Of course, you see lots of short term trading strategies claim to make money but none them do. If you see a track record of profits, then you will see the disclaimer below as well – read it and you will see why the track records are meaningless:
“CFTC RULE 4.41 – Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.
So there you have it – they have never been traded and are made up.
All moves in a day are random and that’s why you never see a real track record of gains – day trading is a mugs game – Avoid it!
Forex Swing Trading
The other short term trading strategies are based around swing trading which tries to catch the intermediate moves in trends or trading ranges and these moves normally last for between 2 days and a week.
This method works and is an excellent way for novice traders to trade, for the following reasons:
1. It’s easy to devise a swing trading system based around support and resistance, momentum and breakouts.
2. There are lots of opportunities – which is an advantage as most traders are impatient.
3. You take profits and losses quickly, normally within a few days – so you don’t need the discipline to sit on trades for long periods.
Swing trading is essentially taking advantage of trades that last anywhere from a few days to a week and taking advantage of over bought / oversold scenarios and these tend to occur all the time.
If you want short term trading strategies for profit, take a closer look at swing trading and you will find it a great way to trade especially if you’re new to forex trading and forget forex day trading all it means is guaranteed losses