Apogee of speculative play is to work within a single trading day, also known as intraday or day-trading. Take this style of traders can be several times transferred from one asset to another, from long positions in short, a night sure to go in money.
If a trader in the foreign exchange market managed to earn even 1% per day and if it would work so well every day (and in the year of approximately 220 working days), the year he could earn more than 200% per year. However, intraday trading will take all the time that the trader, because he never knows in advance, at which point the market will be a strong movement, where you can earn.
In most cases, intraday trader only uses technical analysis as opposed to investor-fundamentalists, as well as fundamental factors may influence the market in the long run, but they are not playing a role in the intraday time scale, with the possible exception of price fluctuations based on the news. Effective intraday trader must possess in ways that capture of motion arising from the emotional reaction to important news.
It is necessary to highlight two basic approaches to intraday trade: following the trend and trade of support or resistance. Both methods are viable, and except for trade in speculative and may be used as techniques of positional trade:
- Following the trend. Examine the number of long-term charts - more than the time period you take, the better it will be seen long-term, and the opposite - a short-term movements can often be misleading. As soon as the long-term trend is set, analyze daily and intraday charts. Even if you sell only the very small time scale, then get a much more successful, making the deal in the direction of the intermediate or long-term trend. Ancient as the exchange rules apply here as anywhere else: buy at the bottom of the short timetable, if the long-term trend is moving upwards. And sell up if the trend is downwards. Of all the methods of trading following a new trend or a purchase of a break up and sale to break down eventually it may be most effective. According to it, the trader should be the price, entering into the market in the belief that the new peaks generate new maxima and new minima give rise to new minima.
For this method, characterized by the fact that, although statistically it is justified (that is the correct transaction is more than false or profit for the first exceeds the loss of a second), psychologically it is difficult to give the majority of traders. Indeed, the trend is already a breakthrough peak or, alternatively, a minimum price and the trader think that it is against the rules. However, there are many approaches to find, confirm and manage risk in the trading system to help the trader breached and feel confident, limiting potential losses for each of the transactions, which may prove erroneous.
- Trading on the support and resistance. In this approach should first determine the direction of the daily trend, possibly sacrificing this one-the first two hours of trade, where this trend can not predict in advance on the basis of long-term schedule. When a trend becomes apparent, and the technical level of support for the upward trend or a technical resistance level in the descending order. Methods for determining these levels in the literature, and on the Internet, gives a lot, and almost all of them apply.
At the ascending trend player will buy when prices are approaching the level of support to descending - selling when prices approach the level of resistance. When obvious and apparent effectiveness of this approach is not always able to correctly identify the raw data, ie the direction of trends and levels. In addition, the trends within the day can dramatically change the direction depending, for example, come from the news. Thus, a risk management strategy and limiting damages in case of error, and here are a necessary condition for success.