Forex trading is generally split up into 3 categories. Short term , which is any trade that lasts less than hours. This can be as little as 5 minutes or as long as 2 days but it is generally referred to as short term forex trading. Medium term is from 2 days to a week or 2, this is also called swing trading and can be highly effective for the beginner trader.
All of these are obviously BS, but the truth is you can make a good living and slowly grow your bankroll with smart day trading strategies.
Below are a few of these I personally recommend. They are 2 completely different things. Long term trading as I mentioned above is taking out a position with the intention to keep it for a long period of time.
Generally traders should start with longer-term trading to get used to the fx markets themselves, but once adversed in the basics you can make money trading in shorter time frames. Remember to sign up to a broker with good tracking and where you can draw your own support and resistance lines to avoid any unnecessary mistakes.
Remember to also do your own research before even thinking about starting! Never listen to 1 single expert, always get as much information from reliable sources and then make your own decision.
The hammer and hanging man are candlestick strategies based on a market reversal. When looking for a hammer or hanging man you should know the resistance levels.
Forex traders always over complicate things and candlestick patterns work extremely well when the correct support and resistance levels are drawn. The next step is to understand what a hammer and hanging man is and then when to trade. So a hammer is a bullish reversal signal. A hanging man is the exact opposite and is a bearish reversal signal. As you can see in the graph right, a bullish hammer occurs and the next movement was up both straight away and longer term this is a 15 minute chart but it shows the general direction a hammer has.
There are a couple of requirements for hammer or hanging men, but the number 1 is that the candle must have a large lower shadow, generally the larger the better. With a small or ideally no upper shadow. This shows a quick and reliable change in the market. One of my personal favourite short term trading patterns as they are extremely strong signals that the market is reversing. This is a 2 candlestick pattern. This is where we are looking for the first candle to have a large real body for example a bull candle.
The next candle should be the reversal of the first and should be even larger and hence engulf the first candle entirely. This works both at resistance and support levels, and your first step again should be to draw these levels in and when you see the second candle completely engulfing the first, you should make your trade. The image below shows both in action. The morning star is a 3 candlestick pattern. It is also a bullish reversal signal. The candle is a large bearish candle, followed by a small candlestick of any type, ideally this would be a dojo and if it is then the signal strength is increased.
The 3rd candle is a large bullish candle that closes above the midpoint of the initial candle. We would look for this in the downtrend. These are some of the basic strategies I use on a day to day basis when focusing on short term trading.
I like to look at the 15 minute charts for these patterns and make quick 0. If you set correct stop losses and take profits at the correct level there is no reason why you cannot become a profitable forex day trader. Thanks for reading and if you enjoyed the article remember to share and like.
Tom is the owner of Elite Forex Trading. A website that provides beginner tips, trainings, reviews and strategies to help newbies get started making money in the forex markets. The top short term fx trading strategies you can use on minute markets to make quick, small profits and create a profitable forex trading strategy.More...