Short-Term Trading Strategy with High Profit Ratio

WikiFX Strategies (23 Mar.) - Short-term forex trading is popular among investors for its little principal but high returns. This paper will introduce several strategies that bring about a high-profit ratio.

1. Trade on short-term support/resistance

It is the best approach to execute short-term trading, with the core lying in spotting the key prices and trading breakouts. The only thing you need to do for risk management is to put stop-losses above and below the key price levels. Stay assertive when exiting the market, otherwise, your short-term trading will turn into a long-term one.

2. Trade on the short-term trend

To gain as much as possible once the trend favors you. If the intraday trend is interrupted, you could open another position in the breakout direction. If a currency pair embraces three rallies within the same trendline, chances are the price will start trending clearer. At this time, what you need to do is to trade on it.

A stop-loss is also required, which should be set at the price around the third rebound. In the case of a promising trend, to place a stop-loss manually is acceptable. Such trades could last until the price breaks the trendline.

3. Candlestick patterns

The reversal pattern on the chart is the key issue, which is adopted as the trading signal with the time frame set to 1 minute, 5 minutes, and 15 minutes. An effective stop-loss often sits in the side where the reversal candlestick is opposite to the trade, including the candlestick wicks.

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