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by Ashraf Laidi
Posted: Feb 22, 2010 5:00
Comments: 3111
Forum Topic:

Commodity FX (CAD AUD NZD NOK)

Discuss Commodity FX (CAD AUD NZD NOK)
 
georgetorrent
Dunedin, New Zealand
Posts: 0
15 days ago
Jan 26, 2016 7:07

How To Start Trading: Trading Styles

Many people are first introduced to the financial markets through investing. The purpose of investing is to build wealth slowly over time, and this is typically accomplished through a buy-and-hold approach: making investments – such as in a stock, basket of stocks and mutual funds – and allowing price to fluctuate over time. Investors “ride out” the inevitable downtrends with the expectation that prices will eventually rebound. After years or decades, the investment will, in many cases, increase in value and provide positive returns for the investor. Long-term returns can be further amplified by compounding through the reinvestment of profits and dividends. Investments are often viewed as a means of building wealth to provide stability and income during the retirement years.

Where investments are typically held for a period of years or even decades, trading involves the frequent buying and selling of stocks, commodities, currency pairs and various other securities with the intention of generating returns that outperform a buy-and-hold strategy. Trading profits are viewed as income since profits are “taken off the table” on a regular basis (as opposed to investing where positions are generally left alone over the long haul). Trading profits are achieved through buying low and selling high, and trades are entered and exited within a relatively short period of time. This time period can vary from a few seconds to months or years, depending on the trader’s style. The following chart lists the four primary trading styles - position, swing, day and scalp - with the corresponding time frames and holding periods.


Trading Style Time Frame Holding Period
Position Trading Long Term Months to years
Swing Trading Short Term Days to weeks
Day Trading Short term Day only - no overnight positions
Scalp Trading Very short term Seconds to minutes - no overnight positions
Position Trading
Position trading encompasses the longest trading time frame in which trades span a period of months to years. Position traders may use a combination of technical and fundamental analysis to make trading decisions and often refer to weekly and monthly price charts when evaluating the markets. Typically, short-term price fluctuations are ignored in favor of identifying and profiting from longer-term trends. This style of trading most closely resembles investing; however, while buy-and-hold investing typically involves long trades only (profiting from a rising market), position traders may utilize both long and short trading strategies.

Swing Trading
Swing trading refers to a style of trading in which positions are held for a period of days or weeks in an attempt to capture short-term market moves. In general, swing traders rely on technical analysis and price action to determine profitable trade entry and exit points, paying little attention to the fundamentals. Trades are exited when a previously established profit target is reached, when the trade is stopped out (moves in the wrong direction) or after a set amount of time has elapsed. Because swing trading takes place over a period of days to weeks (with an average of one to four days), this trading style does not necessarily require constant monitoring. As such, traders who are unable to monitor their positions throughout each trading session often gravitate toward this popular trading style.

Day Trading
Day trading refers to a style of trading in which positions are entered and exited on the same day. Unlike position and swing traders, a day trader does not hold any positions overnight; trades are usually closed using a profit target or stop loss. Day traders typically use technical analysis to find and exploit intraday price fluctuations, viewing intraday price charts with minute, tick and/or volume based charting intervals. Because trades are held for a period of minutes to hours, large price moves are uncommon, and day trading relies on frequent small gains to build profits. To leverage their buying power, day traders usually trade with margin. Day trading is a full-time job since positions have to be constantly monitored and traders need to be made immediately aware of any interruptions to technology (for example, a lost Internet connection or a trading platform issue).

Scalp Trading
Scalp trading is an extremely active form of day trading that involves frequent buying and selling throughout the trading session. Scalp traders target the smallest intraday price movements and rely on frequent and very small gains to build profits. Profit targets and stops are used to manage positions that are generally held for a period of seconds to minutes. Because gains are small on any one trade, scalpers may place dozens or even hundreds of trades each trading session. Precision is paramount with this style of trading, and scalping requires constant and alert attention to the markets.

What Style Are You?
Traders must consider a variety of factors when selecting a trading style, including:
• Account size
• Amount of time that can be dedicated to trading
• Level of trading experience
• Personality
• Risk tolerance
In general, there is an inverse relationship between trading time frame and the amount of time you will have to devote to the markets. For example, position traders may be able to spend a couple hours each week evaluating and managing trades. Scalp trading, on the other hand, is a full-time job and these traders spend every minute of each trading session actively managing trades.

Many market participants - whether investors or traders - do not fit neatly into any one category. For example, many traders are also long-term investors, while others may primarily day trade with a few swing trades mixed in.

For more details please visithttp://www.capitaloneforex.com


djellal
LAUSANNE, Switzerland
Posts: 531
1 year ago
Dec 12, 2014 17:48

#Oil on the mva 200 next support at 50$.
#Brent near mva200 and monthly support 57.80$.
BUY the dip Long Term + long put. #brentcrude $usd
Ashraf Laidi
London, UK
Posts: 0
1 year ago
Sep 16, 2014 12:23
In reply to Rob's post
Rob,

The differences between my Premium Insights service and the HFT Forex are the following:

1. The HFT FOREX will contain Forex recommendations by Ashraf Laidi based on actual trades.

2. HFT FOREX will contain a brief comment with regards to rationale for the recommendation, whereas AshrafLaidi.com Premium Insights include recommendations with charts and trading rationale.

3. There may be 2 or 3 trades open under the HFT FOREX, whereas up to 10 trades may be open under the Premium Insights.
As the HFT FOREX service progresses ahead in autumn, we plan to incorporate the trade recommendations into a real account.


Ashraf
Rob
New York, United States
Posts: 305
1 year ago
Sep 16, 2014 0:57
In reply to Ashraf Laidi's post
Thanks for the reply Ashraf - I got stopped out too soon... and missed this message without checking back enough.

One question - how is what you're doing with Hamzei Analytics different than your Premium insights?

Thanks,
Rob
Ashraf Laidi
London, UK
Posts: 0
1 year ago
Aug 18, 2014 15:29
Hi Rob,

Sorry for the delayed answer;

USDCAD has been showing some sharp but short lived rallies. I think 1.1080 is possible but not before mid Aug. It will take a lot to undo the 5-month downtrend. As long as we continue holding above the 10865, then buying the dips should gradually get us above 1.10.

Ashraf
Rob
New York, United States
Posts: 305
2 years ago
Jul 26, 2014 1:18
Hey Ashraf,

Doing great with the premiums, minus GBP/USD...anyway

Any USD/CAD premiums on the radar?

-Closed above Daily/Weekly downtrend from March.

-Closed above 55DayMA - albeit 200DayMA is right above at 1.0830

-Closed above 200monthMA

Am I crazy to see 1.1080 in about 2-3 months?

Not sure your take on the fundamentals, or technicals for that matter.

Thanks!
Ashraf Laidi
London, UK
Posts: 0
2 years ago
Jul 23, 2014 12:40
1st $EURAUD short entry @ 1.4550 in progress

2nd $EURAUD short entry @ 1.4600 in progress

Current Price: 1.4258


Ashraf
Ashraf Laidi
London, UK
Posts: 0
2 years ago
Jul 8, 2014 12:37
Ashraf Laidi
London, UK
Posts: 0
2 years ago
May 13, 2014 20:03
Watch out from RBNZ speech tonight in 2 hrs time from now he will talk NZD down so look into NZDJPY shorts and AUDNZD longs


Ashraf
Ashraf Laidi
London, UK
Posts: 0
2 years ago
May 8, 2014 12:04
Hi Will ,

I remain long USDCAD in the Premium Insights as well as in my own trading. Sitting on a loss. I may have to take a partial loss and hedge the rest via short NZDCAD.

Ashraf