.%20This%20is%20a%20sort%20of%20mind%20game%20that%20person%20to%20person%20have%20different%20thinking%20and%20approach.%20While%20it%20comes%20to%20quick%20short%20trade%20that%20is%20opened%20and%20closed%20within%20two%20to%20three%20hours,%20it%20becomes%20necessary%20absolutely%20to%20stair%20the%20computer%20and%20watch%20the%20price%20action.%20You%20cannot%20relaxand%20you%20need%20to%20be%20up%20on%20your%20){kind=link}
Judgement of Trading
Judgement of Trading
Whether it is Intra Day Trading or Day Trading, the bottomline is return on investment (ROI). This is a sort of mind game that person to person have different thinking and approach. While it comes to quick short trade that is opened and closed within two to three hours, it becomes necessary absolutely to stair the computer and watch the price action. You cannot relaxand you need to be up on your "toes" always. The tension surmounts when there is huge volatality and decision making becomes difficult. It is pertinent to mention here that Simple Methods to Trading is the one that reduces tension.
Some intra day traders like to always Buy and Sell while some others like to Sell and Buy. Typically, the intra day traders use a short period candle like the 10 minutes or 15 minutes chart. The approach to them is to quickly and urgently close the trades. Frankly, for the 15 minute and 10 minute traders, their approach, if followed by the technique henceforth given can make trading very interesting and rewarding.
Every 15 or 10 minute candle does not give a big variation like 30 or 40 pips range at an average. Therefore, the last five candles average movement of pips should be taken as a basis and if worked out on their price action, it can give us a fair idea to Risk and Reward proportions.
For example, the last five candles of a 10 minute chart gives you a variation of 30 Pips, then you can have your Stop at 15 Pips and Profit at 20 Pips. Note here that in a 10 minute chart, the Risk to Reward Ratio like 1:2 or 1:3 cannot be applied like a 4 hour chart or 1 day chart. Therrefore, for every 15 pip loss, you cannot make 30 pips consistently, hence the Risk to Reward Ratio should be 1:1.33 that means for every 15 pip loss, you can realistically make 20 pip gain.
The Golden Rule for Risk to Reward Ratio for short term tradeson 10, 15, 20, 30 and upto 240 Minute Chart should be 1 : 1.33 or for every 100 Pip Risk, you can get 133 Pips as reward.
There will be a seres of small losses that the short term trader has to predetermine and get prepared mentally. For every gain in a trade, it can bring down the losses to some extent. As there are seres of losses that happen, there is also a possibility to achieve seres of gains. So it is a "tug of war" game and it should be played consistently till one achieves profit levels.
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