subject: Different Types Of Time Frames For To Trade Forex [print this page] One of the surest roads to success in trading is sticking to a time frame that suits your personality. Time frames can be summarized best between day trading, swing trading and position trading. Let's take a look at each styles overview in order to help you decide which is right for you.
Intraday trading or day trading is also known as scalping and traders places several trades a day which last for very quick periods of time lasting often minutes and sometimes up until hours. Day trades are generally small in size and are very frequent with many trades taken each day.
There are many advantages of day trading which include very little risk is taken upon by traders as they tend to trade small size with tight stop losses and take profit levels. Intraday trading requires intense focus as traders watch each market tick and manage their positions.
There is always risk in trading and while there are upsides to day trading there are also down sides. Cons of intraday trading include traders due to frequent trading pay a high amount of fees through spreads or broker commissions. Also small mistakes can turn into large losses if a position gets away from a trader and their account can loss a lot of money in a very short amount of time.
Swing trades can last from anywhere from one day to several days or even weeks. Typically swing traders try to catch price retraces or trend reversals using indicators or price action to help tell the tale of the tape. Using swing highs and lows from recent price action traders use these points of reference for placing their entries and exits.
One of the most loved time frames there are too many advantages to swing trading to talk about right now but among them are the ease of trade involved as you are trading higher time frames which result in less time needed to watch the market as needed when day trading.
The downside or cons of swing trading is that traders can get emotional attached to their trades and expected outcome allowing trades to spiral out of control and turn what should had been a small loss into a large loser.
Position trading which is also known as trend trading is a buy and hold type method where positions can be open for anywhere from a few days, to a few weeks or even a few months or longer. Position traders like to get into a winning positions and build into that positions watching it grow bigger and bigger.
There are many advantages to position trading as the turtles proved anyone can do it and it is thought to be the easiest method known to many. Very easy to trade since usually it is traded off of the daily time frame you need only set or adjust trade orders once a day.
There is always a downside and when it comes to position trading the largest con is that often traders give back big gains while trying to hold a position for even larger gains.
Once you find out what time frame is best for you it will be easier for you to settle in and get to know that time frame and then you will be able to create a trading plan based around that. The more experience you have getting to know a market the better you will be able to trade it.
by: Paul Gates..
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