Foreign exchange investment strategy - ultra-short-term strategy
The so-called ultra-short-term strategy: usually refers to the trading strategy on the 1-15 minute cycle chart. The profit target is generally around 15 to 50 points, the stop loss is generally about 1/3 of the profit, and the trading time is placed after the opening of the European market.
It is worth noting that this strategy should stop losses as timely as possible, and must not resist orders, so as to preserve funds to a greater extent. Because of its flexibility and changeability, there is no need for long-term patience and waiting. It is more suitable for groups with relatively leisurely working hours, free time, and access to the Internet at any time, but frequent transactions require relatively high handling fees.
It also has a not-so-elegant name--scalping, and its English name is Scalping. The meaning of placing it in the foreign exchange market is "to gradually obtain and accumulate small profits through multiple operations".
Rayner Teo said that he personally does not recommend this trading strategy for ordinary traders, because transaction costs will slowly eat up your profits. And compared with robots, people have an irreparable disadvantage-the reaction is not as good as that of computers. This trading strategy has extremely high requirements for speed, and the holding time can only be a few minutes or even a few seconds.
Scalp traders need to keep an eye on the market all the time, and the main trading tool they use is the order flow, which will show the user the buy and sell orders in the market.
There are pros and cons to this trading strategy. The advantage is that there are a lot of trading opportunities every day. Skilled traders can earn ten times or even dozens of times the profit by using this strategy, but it is not a perfect strategy, and it can bring high returns. high risk.
Individual traders may have little or no awareness of the risks of this strategy. When many individual traders use this strategy to trade, they often end up with a liquidation after making a few small profits.
To sum up, this ultra-short-term strategy has four main risks:
It is very difficult to predict price fluctuations from a few pips to tens of pips;
The development of algorithmic trading puts people at a disadvantage;
Cost issues caused by spreads;
Double pressure on the body and fine sleeves.
Of course, the risks are not limited to these four points, but those who can successfully use this strategy must be the masters who have overcome these four points.