Techpally exposes his Strategies for Beginner Forex Day Trader 

Techpally exposes his Strategies for Beginner Forex Day Trader 

 

Most traders fail because they don’t have a clear set of rules. 

You just start trading and hope for the big trade that makes hundreds of dollars.

But at the end of the day, there will be more loss than profit in the account.

You need to develop a trading plan that has the criteria where the best chances of a winning trade will arise.

 

Plan your Trade and Stick to it

Define and write down the conditions that must be met to place a trade, says Techpally business editor.

Simply buying when there’s uptrend is the herds mentality, you can’t hope that a commodity will continue a uptrend after your purchase.

You need to find when opportunities will arise, the right bottom price for entry and when to liquidate your position when commodity is about getting to the peak. 

Although this is easier said than done, but you need to plan what’s good for you, considering your goals, and risk appetite.

 

For example:

1.) If in the EURUSD in the 4-hour chart, the exponential moving average 200 is still 20 pips above the current price and the price has not touched the EMA200 for at least 10 days and

2.) Another support line falls to this price level, then I position a sell limit order 5 pips above the level and bet on a rebound at this level.

3.) The order is only placed if there are no relevant risk events (NFPs, interest rate decisions, etc.) pending in the next two hours.

4.) The risk-reward ratio is 1: 1 so that SL and TP are set at the same distance from the purchase price.

This example shows you how a day trading strategy can be set up and how the trading plan works. 

You can use this as a checklist for every trade and check whether you have adhered to your setup or not, TechPally advised. 

If you notice after a relevant number of trades (at least 100) that this setup has brought in more winning than losing trades, you have a working day trading strategy.

 

When do you end a trade?

There are several ways to exit a trade. 

You should set yourself a goal for the trade from the start and think carefully about whether and when it makes sense to deviate from that goal.

You should add Stop Loss and Take Profit to trade immediately after opening. 

This means that you don’t have to stay in from of your computer all through the day to monitor your trade.

 

Trading Styles you can Try Now

Where you want to end your trade depends largely on your personality and thus on the trading style you choose.

These four styles are generally available to you:

  1. Scalping – Scalp trades are traded in large numbers and with a low point target. 

The trade often only takes a few minutes.

 

  1. Day trading – A day trader holds a trade for a few minutes or hours and closes his positions at the latest at the end of the trading day.

 

  1. Swing trader – A swing trader has a goal of several 100 pips or points, which results in a holding period of several days and weeks.

 

  1. Position trade – The position trader has the longest time horizon of all and needs several months for his trade.

 

In general, it makes sense to stick to the intended goal. 

The difficulty in trading on the stock exchange is to find the right balance between “I’ll take the trade to the last point” and “I’d better take the paper profit with me now”.

It often also helps not to observe an existing trade non-stop, but rather to check the position as rarely as possible. 

The market no longer needs our presence, because the trade has already been implemented.

An early sale is still worthwhile at the end if the fundamental conditions have changed, says Techpally CEO.

 

Day Trading chart Patterns and indicators

The charting technique helps us to develop ideas and to optimize trade entries and exits. 

Chart technique includes:

  • Candlestick patterns, also called Japanese candlesticks 
  • Technical analysis, for example, trend lines 
  • Volume, not necessarily chart technique but also an important indicator

There is now an unbelievable number of technical chart indicators that need to be critically questioned as regards their advantages.

 Often, it’s the simple trend lines and averages that work properly.

There will always be people who criticize the chart technique because it is related to the past. These people usually did not understand the purpose of these tools. 

What we are looking for are zones in the chart that are observed by many market participants and where many traders implement the same idea.

Note: If more buyers than sellers place their “market” orders in the market (i.e. directly, without a limit), the price rises and, conversely, it falls.

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