Short Term Trading

[robertvo]

I finished reading 3 books on technical stock analysis. I am interested in short term trading (like swing trading) but not day trading. I can afford to spend about 30-60 minutes a day to analyze the market enter orders. (I’d like to hold my positions in the range of 2 days to 2 weeks) Recently I came across Forex was wondering if all the knowledge I learned the books for stocks would apply. I see you’re using the same indicators patterns. The only difference is that Forex doesn’t have volume which plays important role in stock trading.
I kind of like Forex because you don’t pay hefty commissions you can start very small.

My question is:
Is it realistic to make profits by spotting short term trends in Forex?
Or the only option is to sit in front of your PC hunt pips all day long?

[mishak]

Hello robertvo welcome aboard

Well most forex people speaking about "short term" sometimes mean "intraday" even "scalping". You better use the word "swing" for holding position for two days(weeks).

Yes it is realistic to make profits by spotting 2-10 days' trends on forex.
The most important not to use aggressive leverage (1:5 ) place decent stop-loss orders take your time to pick the better moment to enter a trade.
You may consider to read the thread Why bother day trading? on our Forum
look for the word "swing" the Forum's home page search box.

Take care have fun

[robertvo]

I was wondering if I use high leverage like 1:100 the currency I hold suddenly (over the weekend) drops big time am I responsible for the thouss of dollars minus in my account? Or is there some kind of protection?

In other words If I use $200 can I loose $20000?
(I am assuming that something really bad happens my stop can not be filled)

Thanks
Rob

[TRADERguy]

Originally posted by robertvo
I was wondering if I use high leverage like 1:100 the currency I hold suddenly (over the weekend) drops big time am I responsible for the thouss of dollars minus in my account? Or is there some kind of protection?

In other words If I use $200 can I loose $20000?
(I am assuming that something really bad happens my stop can not be filled)

Thanks
Rob

If your broker does not offer guaranteed stops then yes you will be exposing yourself to the possibility an adverse gap opening.

[Smurf]

Dear Rob

The nice thing about currency exchange rates is that they don't publish faked earnings they don't file for chapter 11 over the weekend. If you're using $200 that will typically buy you two mini positions or $2 per pip. If you're on the wrong side of an important announcement you may lose 200 - 250 pips or $400 to $500. whereas our beloved ps such as Eur/Usd do gap over the weekend in order for you to lose $20000 either America or Europe would have to sink into the sea.

Jokes aside many brokers offer mini accounts where $50 or $100 buys you $1 per pip in a currency p - meaning approx. $12000 in the Eur/Usd e.g. If you want to debut with daily bars I strongly suggest you demo-trade for a while then move up to a mini account for a while before you consider throwing around larger amounts. Daily bars represent quite a risk - especially for novices like you me of course.

Kind regards

Smurf

[logeaux]

Hi robertvo

It is possible to realistic to make money in the forex market by spotting short or long term trends in the forex markets. When you spot the trend make the trade set your stop limit orders. If you have truely spotted a trend you stop order doesn't remove you the market too early then you are a success. The key here is being right.

[gstefanick]

Hello

I'm a 'swing' trader. I hold positions for a day up to a few weeks. I have ready many books over the years. I read one recently which might asist you. Forex Made Easy by James Dicks. You can find the book on ebay the web --

It talks about the difference of stocks forex swing trading. You will find that most if not all the books your read will cover the same topics over over but this book covers a lot for the money even tax deductions regrading trading...

You will find the indicators will work the same if not better. Better I say is becuase nothing yes nothing in the world trends like MONEY!.

I personally use MACD MOMENTUM. These work good for me...

Good luck to you my freind.

George

[Wallace]

Robertvo: Day-to-Days trading can be very profitable. The fx markets' technical Close is at 6pm EST Mon thru Thursday 4pm EST Friday. Market openings on Sunday vary according to the online fx broker.

Recommend you read: ‘Elliott Wave Principle : Key to Market Behavior' by Frost Prechter originally published in the 1970s last edition is 1990. The text provide a theory of price movement in terms of Waves rather than 'swings'. It will also introduce you to the use application of the fibonacci ratio a tool that's part of every charting program very useful to project price targets / swing points.

Overloss: as has been stated some brokers guarantee Stops able to do so because of programming in their order entry software; likewise they program an amount below which a client's loosing trade will be closed due to lack of margin. That amount varies among brokers so prior to choosing a broker to open an account with ask them what amount they use fxcm for instance closes trades when the Account Margin is reduced to the minimum Trading Margin for the lots/minilots being traded. Unlike futures trading overloss is prevented.

Search MoneyTec for lots of info on brokers Swing trading EW –Elliott Wave fibonacci demo trade for a while to test/examine your trading system/s.