Five Secrets of Short-Term Forex Trading

Short-term operations are a common operating technique in Forex transactions, and many investors are also keen on this method of quick profits. So what are the secrets to increase returns and reduce risks? Here we will introduce you to the five secrets of short-term Forex operations.

Five secrets of short-term Forex operations

First, be happy

If you feel that short-term trading is not simple and painful, don’t do it. The so-called short-term trading is day trading, which means entering and exiting on the same day and not leaving it overnight. Long-term stock holdings are troublesome for a long time, but short-term trading does not last overnight, so you can sleep peacefully at night. Because the holding time is short, the time to worry is also short. Of course, a holding period of one or two or three days is also classified as short-term trading. The purpose of short-term trading is to seek excitement and happiness. If you don't achieve this small goal, don't try it.

Second, have a little understanding of technical analysis

Three points depends on ability, seven points depends on feeling. The key point is to understand a few words. If you learn too much and understand too much, you can become a formal technical analyst. Why do you need to do short-term work on your own? You can learn to repair toilets in half a day, and you can do short-term work in just one day of technical analysis. So what do you need to learn? You can draw trend lines on ten-minute charts, use very short-term averages, and explain the performance of price and volume, that's all. The other thing is to look at the market index, listen to the fundamental news and act based on your feelings.

Third, you must have a mathematical degree

Knowing probability is the winning factor in short-term trading. In fact, the probability of a middle school degree is just nice to hear. Maybe people who have never studied arithmetic also know this little problem. A dice with six sides from 1 to 6, three even numbers and three odd numbers, an even number counts as a win and an odd number counts as a loser. If you roll dice for a long time, the probability of odd and even results is about half. Short-term trading refers to the situation of rising or falling after buying. Usually half and half too. How to win in short-term trading? Make one yuan when you win and lose 0.5 yuan when you lose. Out of 100 times, if you win 50 times, you will earn 50 yuan, if you lose 50 times, you will lose 25 yuan, and in the end, you will earn 25 yuan. This is the only winning strategy in my mind for short-term trading. There is no other good strategy. Therefore, after entering the market, if the direction is right, let it run for a while to achieve the goal; if the direction is wrong, exit immediately, and there is no room for psychological considerations.

Fourth, keep an eye on the overall situation

If the general situation is not right, no matter how long it takes, there will be no trading. When the situation is right, the odds of winning will be much higher than the aforementioned 50 vs. 50. If the situation is not right, it is like sailing against the current. Smart short-term trading will give you a long vacation. It is unnecessary to fight against the trend, and it may cause unnecessary casualties. What does it mean to be right or wrong? The great bull market of the 1990s reversed its situation in March 2000. At this time, investors had no way of knowing that the general trend was not good. After October, the 50-day moving average of the technical chart fell below the 200-day moving average, forming a death cross. At this time, investors should completely withdraw from the market, and short-term trading was even more prohibited. This situation completely changed in May this year, when the 50-day moving average turned over the 200-day moving average to form a golden cross. At this time, the two-and-a-half-year holiday for short-term traders is over, and a good trading season has arrived.

Fifth, don’t trade every day

Short-term trading is not trading every day. Those who do extremely short-term trading are called day traders, but they cannot trade on a daily basis. If you make 900 yuan from trading today, don't expect to make another 900 yuan by entering the market tomorrow. The advantage of short-term trading is that it is like running your own business, and you can choose not to do it that day. Don't choose the day when the Federal Reserve is about to announce whether to raise interest rates to do short-term trading. That day should be a day to watch a show.

Short-term operation is not because you don’t want to make big money, but because you don’t want to participate in adjustments where there are too many uncertain factors in the trend. "Uncertain factors in the trend" are a huge risk that cannot be grasped. Using short-term operation methods, you can try to avoid this risk. Therefore, as long as the market's offensive power disappears, no matter whether it falls or not, you must leave the market - this is the principle of short-term operation.

How to operate real short-term trading?

Almost all Forex investors start their futures trading career from the short-term method of fast in and fast out, but this is not a short-term transaction in the true sense. This kind of transaction is similar in appearance but different in spirit from real short-term trading. The vast majority of investors may have been in this kind of trading state that is similar in appearance but different in spirit. They also think of themselves as short-term trading.

However, real short-term trading is like making money in a game, while short-term trading, which is similar in appearance but different in spirit, is like spending money to play games. The two are completely different. Successful short-term trading is like making money in a game, but it is not easy to make money in a game! Short-term trading mainly relies on investors' market sense, rather than rational analysis of a large amount of fundamental information. Price fluctuations throughout the day mainly come from the trader's emotions and psychology as well as the role of funds, especially in sharply volatile markets. This market is also an ideal market for short-term traders. A good trading sense cannot be formed overnight, it requires paying a huge or even painful price! Short-term trading is easy to imitate, but not easy to succeed! Because short-term trading requires investors’ minds to match the rhythm of market fluctuations, at least in most cases. Short-term trading has very high requirements for investors. There is no room for hesitation in entering and exiting. The outcome often depends on one point. The sensitivity of quick stop loss and profit closing will exceed the imagination of ordinary investors.

Short-term trading seems easy but difficult. You can even trade with a short-term trader. In the end, it is he who makes money and you lose money. Normal people use their brains to decide their actions, but short-term traders use their hearts to decide their actions. It can even be said to be the first reaction or instinctive reaction to trade. Short-term trading does not require reasons recognized by the world. It is an act of integrating body and mind, an art, and a state. You can summarize it, but it is difficult to reach its height. The short-term trading model is only suitable for you and is difficult to compile into a teaching material. Successful short-term trading is a happy transaction, a transaction that makes profits in the game. Imitation of short-term trading is a tortured transaction, which is spending money to play the game.