Short trading is one of the most popular trading methods adopted by retail traders. Because it gives you instant gratification. Trading Strategy Guide Team likes to keep trading strategies simple. This article will show you how to turn simple trading principles into the best short-term trading practices. You can read our updated post on the best short term trading strategies below.
Isn’t that a short-term deal? Do you position yourself on opposite ends of the trading strategy spectrum as swing traders? If so, read MACD Trend Following Strategies – Easy To Learn Trading Strategies.
This short-term trading strategy focuses only on price action short-term trading tips to use, but can be modified at any time. Add an indicator to filter out some of the false signals. The best short term trading strategies are pure price action strategies. If you want to use indicators, you need to know how to choose the most accurate indicator for short term trading.
What indicator are you using for this short term trading strategy?
We will simply use a 20 period moving average. Moving averages are easy to find on most forex trading platforms.
We will move on to the best short-term deals. We also review some short term trading tips that can strengthen your forex trading knowledge. There is also a training on Trend Line Drawing with Fractals.
Steps to the Best Short Term Trading Strategy
(Purchase transaction rules)
Let’s start with our first short-term trading tip. To understand price action, you need to understand the underlying causes that make price action patterns work. This short-term trading strategy uses specific patterns derived from well-known strategies used by hedge funds.
Simply put, the best short-term trading strategies are those derived from the Turtle trading system. This system takes advantage of the 20-day price movement. If the price reaches the new 20-day high, we will buy it. Conversely, if the share price falls to its new 20-day low, you will sell the stock (see picture below). The biggest downside to this strategy is that you lose 80% of your time.
Pretty bad isn’t it?
What we did next was flip this trading system. We have turned it into the best short-term trading strategy with over 80% accuracy. Our short-term trading tips will allow you to use this principle and reverse your losing strategy. However, retest your strategy and see if you can create a profitable system. Also, read Simple Yet Profitable Strategies for more trading tips.
Let’s explain and explain short term trading strategies with our simple step-by-step guide.
Step 1: Wait until the market is at its lowest level in 20 days
Calculating the minimum is simple. You can start counting whenever the market goes lower each day. It usually only calculates daily lows that are lower than previously calculated daily lows.
A picture is worth a thousand words, so here’s an example.
In the example above, I pointed out how to accurately calculate the daily low. As we can see, the market was unable to make a new low in 20 days, so we had to stop counting. We started back when the market first made a new daily low.
Now let’s look at how to identify valid 20-day low patterns and trade the best short-term trading strategies correctly.
See the chart below:
Step 2: Wait for the market to break above the 20-day MA
This step is critical to the success of any short-term trading strategy. We don’t want to choose top or bottom. I feel more comfortable entering the market when the price is ready to reverse.
Let’s move forward and define the entry point. This brings you to step 3 of the best short-term trading strategies.
Step 3: Enter a long position when the 20-day or higher MA is reached
Buy the market as soon as it breaks the 20-day moving average. The combination of the 20-day Low Pattern and the 20-day Moving Average is the secret to a strong short-term trading strategy. Incorporating the 20-day MA into your daily trading system is one of the best short-term trading tips.
We’ve got a position, but we still need to decide where to place our protective stop loss and place our profit order. This leads to the next step in our short-term trading strategy.
Step 4: Place a protective stop loss below the swing stop before the 20-day MA breakout
The best short-term trading strategies use very strict stop-loss methods. A clear place to “hide” a protective stop loss should be just below the most recent swing low prior to the 20-day MA breakout. If the market breaks above the 20-day EMA and breaks below its low, it indicates trouble. That’s reason enough to close the deal with a small loss.
why? Because it’s a sign that the trending trend is still maturing and about to resume. This is why I no longer want to participate in trading. If you’re listening to price action, these are the best short-term trading tips the market can offer.
You will learn where to profit from the following short term trading tips.
Step 5: Profit from the 50% Fibonacci Retracement of the Dominant Downtrend
A logical place to take profits is at the Fibonacci 50% retracement. It is usually the first real target for which the market may reverse. We don’t want to take the chance and risk of losing more profits. So we will close our entire position here for a good profit.
Note ** The above is an example of a buy trade… Use the same rules for sell trades. In the picture below you can see an example of a real sell trade using the best short trading strategies.
conclusion
We hope these short term trading tips will make you a better trader. As with all other strategies presented in Trading Strategy Guides, strict money management rules should be used. This short-term trading strategy is a perfect example of how to reverse engineer a losing trading system and turn it into a profitable one. Here you can learn how to fade momentum in forex trading.
To learn short term trading tips on how to conquer the Forex market or any other market, don’t spend more than 5 minutes reading How to Profit from Trading. This article has garnered a lot of attention from our trading community.
