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Three advantages of using longer timeframes
The choice of the timeframe (period of time over which the updated charts currency pairs to trade practices is highly dependent on Your personality. Adrenaline hungry trader will likely be to use shorter time-frames and do more action, while seeking to calm the trader will prefer longer time-frame and open for a longer period of time.
Even if You like to move quickly in longer time-frames there are 3 significant advantages when trading.
1. Getting rid of excess number of transactions: Trade on shorter time frames means that to enter the market and out of them are relatively fast and often. Thus it is possible to reach a large number of operations in a relatively short period of time. Especially disciplined traders - kratkosrochnom could be placed in an isolated room, to work within a pre-stipulated time, and then complete the work despite market prospects. But for others it's not: quick success stimulates the appetite to increase the number of transactions until their excess.The inability to make a profit in such a limited time often requires the trader's "revenge" (which would have likely adverse consequences) and can also lead to a greater number of open transactions.
2. The effect of noise reduced to nothing: trading using short timeframes, You are much more dependent on momentary fluctuations in the markets. These sporadic shifts can very easily undermine Your system analysis. Any exporter or importer places on the market a large enough order to meet their needs, can rock the whole boat." For longer periods, these impacts are not felt, smoothed.
3. There is no need to refer to a longer timeframe: trading on short time intervals, You have to look at charts with longer intervals to get a better look at the overall picture. This complicates the analysis and trade.
|Category: Forex | Added by: (29.10.2017)