Short-term trading- this is the most dynamic style of working with currency pairs, allowing you to quickly increase your starting capital. Along with medium- and long-term strategies, such systems form the basis of a speculative portfolio.

A logical question arises: why did short-term trading so quickly gain popularity and supplant other strategies, from the sale of which many authors earned decent money? In fact, there is nothing surprising here.

Firstly, by opening and closing a position within a day, a trader immediately sees the actual result of his activities. In particular, if a profit has been made, the mood rises, plans for the future appear, etc. If you had to record a loss, this is a reason to think about the imperfection of the system while there is still a chance to save the rest of your capital.

By trading medium-term or , the speculator is deprived of this advantage, since a transaction that has been on paper for several months can ultimately be closed with a large loss. Of course, professionals know the approximate mathematical expectation of their operations and therefore take losses calmly, but beginners often break down.

Secondly, short-term trading is, in theory, more profitable, i.e. under favorable circumstances, the total profitability of such operations is several times higher than the profit obtained from medium- and long-term strategies.

Thirdly, if we consider a certain time interval (year, quarter, etc.), then there are much more short-term transactions than long-term ones, which means that an active trader is aware of many market processes much faster.

To make it clear what we are talking about, consider a simple analogy. Let's say two people are learning programming. One goes to classes every day, and the second once every two weeks. Which one will write their first full-fledged code faster? I think the answer is obvious. The story with trading is similar.

And the last reason why short-term trading attracts novice speculators comes down to simple uncertainty. The fact is that events often occur at night and on weekends, due to which quotes change by hundreds of points, so it’s somehow more peaceful to sleep and rest when all transactions are closed.

Here we should also mention the absence of swaps, which in the vast majority of cases eat up part of the profit. Let me remind you that swap is a fee/compensation for transferring a position to the next day. Theoretically, this indicator is neutral (i.e. determined by the rates of central banks), but very often Forex dealers set it in such a way that the loss from negative values ​​is several times greater than the “penny” positive adjustments.

Features of short-term trading on Forex

I have just listed the main advantages of active speculation, but they also have several serious disadvantages that every beginner should be aware of. Let's list them:

• Short-term trading is associated with high risks, since in many strategies transactions are opened with a large lot;
• Frequent operations are exhausting, as a result of which even a successful trader needs a vacation more often;
• Since the signal can appear at any time, you have to constantly monitor the market (problems with the main job already arise here, so rarely does anyone manage to combine short-term trading and an offline profession);

• A series of unprofitable trades can bring an unbalanced person to a breakdown (in slang this state is called “tilt”), when there is a desire to quickly win back;
• If an experienced long-term worker can get a job in an investment fund (the crowning achievement of a speculator’s career), then a short-term worker has a certain ceiling for professional growth.

Should a beginner take up short-term trading?

The considered disadvantages are very serious, but they all pale in comparison to the following fact - creating a profitable strategy for short-term trading is very difficult.

The graph above shows an example of how the system brought good income for some time, after which the account was “merged.” Please note that martingale was not used here, i.e. the nature of the market has simply changed.

Given this circumstance, it is not recommended to start a trading career with short-term trading. In general, during my entire time working in Forex, I noticed that speculators are developing in two directions:

• The first ones begin to trade intraday, lose capital, after which they leave the market or switch to medium-/long-term;
• The latter learn the basics of trading on large time intervals, and when stable profits appear, they gradually switch to smaller charts (expecting to increase the profitability of operations).

Thus, short-term trading is suitable only for professional traders who have already “acquired” a stable investment portfolio. As for beginners, the forecast here is not so favorable, although without risking real money (which I recommend taking advantage of).

Short-term Forex trading has always been considered the most attractive way of trading for most traders, especially for beginners. After all, with its help there is an excellent opportunity to quickly receive the expected profit, and this process can take from several minutes to a couple of hours inclusive. However, along with the simplicity and speed of generating income, short-term trading also involves a very high degree of risk. Therefore, short-term transactions are best carried out by professional traders who are well versed in the nuances of the Forex market.

Short-term trading transactions (or in other words, scalping) on ​​Forex involve trading within 24 hours (one business day). Moreover, it is at these short intervals that it is very easy to track price movements, using maximum leverage. However, to carry out scalping competently, a trader must adhere to several main rules:

1. It is necessary to carefully monitor the moving average on the chart in order to be able to monitor how downward or upward price fluctuations develop in the foreign exchange market.

2. The trader also needs to constantly monitor cycles, which can help him determine the ideal moment to open or close current positions.

3. You always need to feel where exactly the trend will go in the future. That is, when the general trend begins to reverse against the trader, positions must be closed, since the chance of concluding a profitable transaction is significantly reduced.

If we talk about the advantages of short-term trading, then we should highlight the main positions for a trader:

1. Due to smaller time frames at the same price ranges, the trader has the opportunity to earn more and faster.

2. Minimum expenses on spreads.

3. You can open positions on both short and longer positions.

4. Brokerage companies charge small commissions for short-term trading.

5. The ability to place small stop orders, which allows you to trade with a minimum deposit.

6. The trader can expect to receive greater leverage.

7. There is a high volatility of the currency, which allows the trader to make maximum profit.

However, short-term trading also has its certain disadvantages, which are as follows:

1. A very high psychological load on the trader, especially if he trades without a Forex advisor and a clearly developed strategy.

2. Very often there are delays in the execution of orders.

3. There is a high degree of competition among traders in the market.

4. During short-term trading, the trader is required to be constantly present in the market.

5. A high degree of risk, which lies in the fact that a trader must always take into account market movements and react quickly to it.

Thus, short-term trading represents a specific strategy that allows a trader to make small but more frequent profits by quickly opening/closing trading positions. In addition, when carrying out short-term trading, fundamental analysis, as a rule, is not taken into account, so the trader always needs to anticipate the fact that the price may very unexpectedly change its direction and go in the opposite direction. Such trading requires the trader to have a good knowledge of the Forex market and all the processes that take place there, as well as increased concentration and stable psychological preparation.

The term “short-term trading” can be understood in different ways, but in Forex, short-term trading is generally considered to be transactions that last less than 1 day. Moreover, short-term transactions, as a rule, fit within one trading session (Asian, European or American), i.e. about 6-8 hours. An even narrower understanding of short-term trading is making transactions within 5 minutes to 4 hours.

The main advantage of short-term trading is the lack of risk when being outside the market. By trading twice a day for several hours, the trader almost always keeps his capital safe, since the rest of the time he does not make any transactions. Moreover, during “downtime” he does not need to be at the computer and monitor charts. The disadvantage of short-term trading is that the trader is sometimes afraid of missing out on a profitable opportunity and, against this background, acts impulsively or in the absence of sufficient grounds for carrying out a transaction.

Most short-term traders focus on various chart and candlestick patterns rather than the overall trend. Some traders argue that trend following interferes with their own strategy, while others, on the contrary, follow the trend because they consider this tactic less risky. In fact, there is always a risk, because in addition to the trend there is also a correction; and yet, in the long term, focusing on the main trend may well be the right move.

The most famous short-term trading strategy is described by Toby Crable in the book Intraday trading using short-term price patterns and opening range breakouts, written in 1990. The print version of the book is currently unavailable, and the digital version costs $950 (previously a printed copy of this book cost $3,000). A breakout of opening ranges refers to a situation where a buy order should be placed when three circumstances occur simultaneously:

• there is a gap between closing and opening;
• after the opening bar, an engulfing or doji appears, which signals a strong change in sentiment;
• The opening range has been narrowing over the last 3-10 days.

Initially, the concept of opening range was used in the stock market, where there is a clear boundary between the closing and opening of the market. In Forex there is no such clear barrier: opening and closing can occur at any time within 1-2 hours. Formally, the closing occurs in New York at 0:59 Moscow time, and it is at this time that the data servers are guided, but in fact the market closes earlier. All this does not mean that the strategy of breaking through opening ranges in Forex is ineffective, there are simply very few gaps in the foreign exchange market. The real closing occurs only in New York on Friday evening, and the opening, accordingly, is on Sunday afternoon, although sometimes gaps appear when the sessions change from Asian to European. But the point is not that there are few gaps, but that when they appear, it can mean anything, and not just what Crable described in his book.

Also well known in short-term trading are the names of Linda Raschke and Larry Connors, authors of the book "Exchange Secrets". The book was published in 1996, its current reprint dates back to 2016. In their work, the authors describe various strategies with very original names, but its main value lies in price patterns and figures, and not always complicated. So, for example, one of Raschke’s rules says: buy at new lows and sell at highs, and this rule works quite well on a 4-hour chart, especially if you draw classic horizontal lines on the charts at previous lows and highs and wait for a reversal at the new one. prices approaching them.

Another short-term trading strategy is described in the book Trade what you see: how to make a profit on shape recognition. The book was written by Larry Pesavento and Leslie Juflas quite recently, in 2007, and its essence is built around the famous figure ABCD, described by Hartley in 1936. No matter what you think or hear about Fibonacci numbers, the fact that on short-term Forex charts, pullbacks at the 50% and 62% levels occur much more often than on, for example, daily Forex charts is undeniable.

Below is the hourly chart of the EUR/USD pair. Here, an upward movement is first seen, and then a rollback to a level just above 61.8%. The price does not want to fall lower, so if there is no reason to sell, you need to buy. The first buying opportunity appears when the price approaches the 50% level (first circle), the second occurs when the price exceeds the previous high (second circle), and the third occurs when a new high is reached (red horizontal line). In this case, there is also a somewhat unfortunate moment in the form of a strong correction between the two areas circled, and this moment reminds us that there are no ideal figures on the chart, and also that the figure often suggests when to buy, but It’s extremely rare when to sell. It is also worth adding that on the hourly chart it is quite difficult to use a trailing stop loss, so it makes sense to set a regular stop loss and take profit.

Buy trade opportunities based on Fibonacci levels and breakout highs

On the 4-hour chart for the same period, one could have acted differently. We apply Raschke’s rule (“buy at the lows, sell at the highs”) and get a profitable result without getting nervous.

Short-term trading strategies are a variant of strategies that involve generating income by concluding short-term transactions. The peculiarity of this system is that although the transactions are short-lived, there are many of them.

The duration of one open position on Forex depends specifically on the strategy chosen by the trader (from a few seconds to a day). It should be said that, due to its specificity, short-term strategies are very demanding regarding the ratio of profitable and non-profitable transactions.

So let's take a look 5 Effective Short-Term Strategies, as well as their parameters.

Short-term strategy based on MACD divergence in Forex trading

This strategy, with trend divergence according to MACD, is a trading system that is based directly on the divergence of the value line, which is actually called divergence, as well as the line of the standard MACD advisor.

This trading strategy is truly universal, as it can be used on any trading instrument. In addition, this trading system can be used on all timeframes.

It allows you to very effectively find rollbacks and. But it also has a drawback. Unfortunately, this system does not provide precise entry points into the foreign exchange market. Since we are talking about a short-term strategy on long-term time frames, the signals are quite rare.

However, when using long-term systems, they can be used as effective additional signals. Experts recommend within the framework.

Short-term Doske scalping strategy actively used in Forex trading

This is another effective short-term strategy, which is intended primarily for trading with currencies such as:

• JPY/USD;
• GBP/USD;
• USD/CHF

Video: Doskе scalping strategy

At the same time, experts recommend choosing the H1 time interval when trading using this strategy. This trading system is created based on the readings of two well-known technical indicators. We are talking about EMA and QQE algorithms.

EMA trading indicator parameters:

1. Moving Average - Exponential method. In this case, it is better to use the period, 11, 3. (EMA, red);

2. Moving Average - Exponential method. It is characterized by a period: 55. (EMA, pink);

3. Moving Average - Exponential method. Here it is better to use the period 275 (EMA, yellow).

QQE trading indicator parameters:

• QQE period: 6;
• QQE period: 60.

When opening long trades, that is, when buying a trading instrument, all red EMA values ​​are above the pink EMA. The solid curve of the QQE technical indicator, with a frequency of 6, must cross the set level with a value of fifty.

A signal indicating that it is time to exit the transaction is a situation in which the solid line of the technical advisor, whose name is QQE with a period of sixty, crosses the dashed line in the downward direction.

When opening short transactions, that is, when selling a trading instrument, all EMA values ​​should be located under the pink EMA. In this case, the current line of this advisor with a period of six should cross the level of fifty.

A signal indicating that it is time to exit a short trade is a situation in which the QQE adviser line crosses the dotted line with a period of sixty upwards.

When conducting aggressive trading, the Moving Average advisor's readings. Naturally, yellow color with a frequency of 275 is not taken into account. When trading in a conservative manner, experts do not recommend going long when the current price is below the yellow EMA. It is better to open short trades when the current value of the currency is above the yellow EMA.

Trading using a short-term Forex strategy on PSAR and MACD

Working with a strategy on PSAR with MACD also applies to short-term trading systems that are built on two technical indicators. It works based on technical indicators with standard parameters and MACD-combo with parameters: twelve twenty-six, nine.

The platform allows you to trade on PSAR and MACD on all pairs. At the same time, experts recommend a time frame of thirty minutes. The H1 timeframe may also be suitable.

When using this strategy, positions should be opened in the following cases. First of all, when the signals from the above technical indicators coincide. In this case, the line of our MACD-combo should cross and pass the Parabolik SAR points. In this case, the signal must first come from our Parabolik SAR, and only then from the MACD-combo. In rare cases, both may occur at the same time. The position is not opened when the technical indicator MACD-combo gives a signal first.

Signals are considered relevant if they coincide within one time period from the first to the third bar inclusive. The orders must be related to each other as 2:1.

A signal to buy a currency is when the points of the PARABOLIC SAR advisor cross the chart downwards. On the MACD-combo algorithm, the blue line crosses the red line within the time period from the first to the third point inclusive.

The situation is somewhat more complicated when going on sale. A signal for such an action can be the case when the points of the PARABOLIC SAR advisor cross the currency chart upward.

Let us remind you that this may be chart of absolutely any quote. And here, in the MACD_combo indicator, the blue line should cross the red line downwards. Just as when entering the purchase of a currency, the intersection must occur within the time period from the first to the third bar inclusive.

For the most correct entry, experts recommend finding a place that will be the intersection of the MACD-combo lines.

Short-term strategy in Forex trading - the Outsider method

The fourth short-term strategy on our list, the Outside method perfectly fulfills its purpose when working with the GBP/USD pair.

Video: Outsider method

This trading system is created based on the readings of one standard indicator called Moving Average. As you already understand, this tool is based on . In this case, the recommended timeframe is M15. When concluding short-term transactions, the parameters of the Moving Average advisor should be as follows: EMA method: Exponential, with a period of nine.

A signal for opening them can be the case when the current bar does not cross the moving average. Ideally, it should be located as close to it as possible.

It is important that the closing price of the current bar is below the low point of the previous bar. A transaction to sell a currency is usually opened at the opening of a new bar. A Stop Loss order must be placed at the high of the candle of the previous transaction.

It is interesting to note that using this tool you can also make long trades. The signal for their opening can be the case when the current bar cannot cross. He should also not touch the middle advisor, which is called . The closing price of the current bar should be higher than the previous one, and a buy trade should be opened at the opening of the next bar. A stop-loss order is placed at the low of the candle of the previous transaction.

Strategy based on EMA + Laguerre + CCI for short-term trading

Completing our list of the best short-term strategies is a trading system called EMA + Laguerre +. Actually, from its name you can already understand that this tactic works on the basis of three effective indicators.

This system is designed to work with a single pair EUR/USD. As already mentioned, in terms of its gradation of work it is another short-term version, its working timeframe is M5. Before starting to work with this strategy, experts recommend that you always check the settings of all three indicators.

To register profit, an order whose name Take Profit should be placed at a distance from ten to eleven. Otherwise . Regarding the stop-loss order, which, as we know, limits traders' losses, should also be set at a distance of nine to twelve points.

Experts advise closing short transactions or simply moving the STOP LOSS order closer to the cost. But this is only possible if the Laguerre indicator produces a value less than 0.1.

Short-term strategy for beginners

As a rule, all traders can be divided into two large groups: day traders (trading intraday) and long-term traders (concluding up to 10 transactions per year). Almost all beginners do not start with short-term trading, since they want to constantly be in the market, concluding from 100 to 300 transactions per month, or even more. Later, many of them begin to realize that sometimes it is better to skip several dubious signals and choose one, but of better quality, which can bring more profit. Such traders are committed to long-term trading. They can wait long enough for the right moment to enter the market and then keep the deal open for weeks, or even months. Other traders achieve mastery in short-term trading when they realize that statistics are on their side, and out of several hundred closed trades, the number of profitable ones outweighs the unprofitable ones. Let's look at the main differences between short-term and long-term trading, and how to achieve success in both areas of trading.

set profit and loss limits for the day, if reached, do not trade any more on that day.

A good help for a day trader will be the book by practicing trader Larry Williams, “Long-Term Secrets of Short-Term Trading,” in which the author shares his experience of growing a deposit from $10,000 to $1 million in a year. In his book, Larry Williams talks about the basic principles of short-term trading, the three cycles of time and price, optimal entry and exit points for positions, and much more.

Free download of Larry Williams' book "Long-Term Secrets of Short-Term Trading"

Medium-term trading

Medium-term trading is a cross between short-term and long-term trading. More than half of all foreign exchange market players are medium-term traders. Trading is usually carried out on the H4 and D1 time frames, and the duration of the trade ranges from one day to several weeks. A good example of such trading is strategy. For medium-term traders, there is no need for large capital; it is enough to have at least 500-1000 dollars in the account, while the risk is reduced compared to short-term trading and the number of transactions increases to 30 per month compared to long-term trading. By trading medium-term strategies, you can increase your initial capital over several years, and then, if desired, combine them with long-term trading. The main thing is to follow money management and do not risk more than 1-2% of the deposit in one transaction. Profitable trading for you!