A secret of short trading


03/07/2011

Short-term trading is quite limiting in terms of profits possibilities and position placing. Short-term traders are usually so caught up on catching market's ups and downs they don't look for other profit opportunities or they don't think that by leaving a position open at night time they could earn something. Somehow these traders don't rely on news, events or radical changes. This approach to trading is very limiting and incorrect for couple of reasons.

First of all, you are in control over your whole operation. That means that you control the risk, i.e. the stop-loss points. Greater chances are that nothing major would happen overnight and that the gap wouldn't slip by your SL point and you will not lose a deal. Thinking otherwise would make you stuck in one place without a possibility to earn money.

When you set your position, the amount of money you risk is fixed and limited by SL. By not opening overnight positions you limit yourself in time needed to make your initial investment to grow.

Moreover, when you trade at the end of the day with 5-10 min intervals, you lower your profit potential. Instead of keeping a winning position open, like all winners do, you leave I too soon (frequently becoming a part of the losing team).

Sticking to winning position is how people make major profits on their Metatrader Forex investments. They give their investments time to grow (just like crops, vegetables or fruit) and then enjoy the fruit of their labor and patience.


 

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