There are three main time frames you can try and trade in. You can do day trading, forex swing trading or long term trend following but the best way for novices to get in on the action and trade quickly is swing trading - Here's why...
Let's compare the 3 advantages and disadvantages.
Day trading (Daily Ranges)
There are no advantages. Daily price movement is random so you can't win.
Forget all the mentors and gurus telling you they have systems that make money. There "making money" is always a simulated track record going backwards.
We can all be wise knowing the prices, don't try it.
Trend following (Long term Weeks +)
Now you can make huge gains doing this - but you need to be aware that:
1. You have to be very patient and novices normally like to be in on the action
2. You need tremendous discipline to hold big profits without the temptation to take it when volatility eats your open equity.
It can be very profitable but requires tremendous patience and discipline.
Forex Swing Trading (A few Days to about a Week)
I think a novice trader should try forex swing trading to start for the following reasons:
1. You get plenty of action and profits and losses come quickly
2. You are banking quickly and don't need the discipline to sit on a big trend
Basically you don't need as much patience or discipline furthermore ...
It's very easy to understand the logic of prices becoming oversold and overbought and trading into these levels.
Fear and greed, always spike prices too far in either direction (up or down) and always will.
All you are doing is trading into these levels and looking for a return to fair value.
Typically, a position will last for a few days to around a week and you can bank some nice profits. In swing trading, stops are always close behind the level you are trading into and you take your profit before the next important level.
Putting a Swing Trading System Together
It's really just support and resistance levels combined with some momentum indicators.
Any forex swing trading system should be simple but don't be deceived swing traders can make great profits.
You can learn a swing trading system in under a week and soon be seeking triple digit profits in less than an hour a day.
How to Build Your Own System
It's simple to understand, easy to do, you can be in on the action and of course, make good long term profits.
In part 2 of this article series, we will look at how to build a simple, profitable swing trading system for triple digit gains.
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