Successful short term Forex trading is the ultimate goal of new traders who try their luck in the Forex market every year. It is very essential that they have a solid background and understanding the kind of trend on a small time frame as the only plausible retracement of the primary trend from a given higher time frame chart. As a result, the time fame trend becomes an important step is becoming a potential successful short-term Forex trader.
There are specific types of asset that are bound and others tend to move through trends. One asset in particular is the spot Forex market. Currencies that are based on economic statistics usually takes longer and requires the complete four stages in the stage business cycle of expansion, peak contraction and trough.
Intermediate term trends provide for shorter term Forex traders that offer many opportunities to trade long while with primary trend counters the primary trend. Currency traders all over the world are psyche in observing the trend from the previous trading session in order to hit the direction of profitable returns.
Most short-term movements in the Forex markets are driven by news stories and economic reports which are released at different intervals of the trading day. Before the actual release, price consolidates at the time traders see what the impact of the announcement will be. If it was unexpected, a possible reversal primary trend may happen. Likewise, if the news is within the boundaries of what is to be expected, a period of wild reaction along with resumption if the primary trend is most likely.
What happens during times when there is no economic data scheduled for release?
The general rule is that the price has to move. If no news is scheduled, the price will be consolidated during the quieter trading periods and after which it will breakout either in the movement of the Intraday trading or in that of the primary trend. In some case, the price will be pulled back to a support area before resuming to the primary trend which can be a chance for a short term trader to switch to a longer term swing trade.
Being aware of the primary trend is the only possible way for short term traders to recognise the opportunity available for them. Other times the price will usually rally into resistance before the Intraday trend resumes. What’s more, the entry is typically a low risk opportunity to enter a counter trend trade with a specific idea of where to place a stop loss in the event the primary trend recommence.
It is very important to focus on trading instead of trying to teach and trade at the same instance. Opportunities to trade with the trend and counter to the trend usually comes along every day in all markets should the trader have a solid comprehension of the difference between the primary trend and the secondary trend of the market they are trading their goods.