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Trade the big news?
I think this method is risky because the
spread tends to be wide during major
announcement and events. Often,
the price movement turns the opposite
direction after the initial knee-jerk
reaction.
Trade from the trading system signals?
This method could be profitable if the
signal is reliable.
The difficult
task is to find out how reliable it is.
Before purchasing any trading system, it
is always better to visit forums and ask
other traders if they had used the
particular system and solicited their
feedback. If you could write
scripts, it is always good to back test
the strategy in MetaTrader. Even
though past performance cannot guarantee
future results; however, through the
back test results, we can evaluate the
consistency of the performance. If
the strategy produces a + 50% in year 1,
a - 30% in year 2, a + 25% in year 3,
it's probably not a good one.
Day trade vs. swing trade?
This would really depend on each
individual's preferences, trading plan,
and risk tolerance. I personally
don't like to glue to the screen and
watch the markets for long hours.
I, therefore, set up a
trading plan and
defined my risk tolerance for each
trade, and how I would place the trade.
As it mentioned on this site, I use
divergence in
MACD and/or momentum to
trade. I can hold the position
from a day to a week.
Trade just one currency pair or multiple?
This is also depending on each
individual's preferences. I chose
8 currency pairs because I like their
behavior and movement. I didn't
choose British Pound, for example,
because it tends to have wide swings and
it's too much for me. However, it
is always good to start with just one
currency pair and practice. After
a short period of time, you would find
out if the currency pair suits you based
on your trading style, strategy, and
risk tolerance.
Last
Updated:
Sunday, October 07, 2007 10:27:34 AM -0700 |
