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» » Two Kinds of Trading And How You Can Avoid Mixing Them Up


Some of the reasons why traders leave their tried-and-tested trading plans are due to their newly found information that contradicts their original bias in trading. What happens is that they lose the confidence they need on their original trading plan. This strategy, unfortunately, will not work well if you use the new information at the same time frame that you used on the original trading plan.
The key to a successful endeavor in Forex Trading and Forex Broker in Germany is the expertise that traders acquire through experience. There are two groups of expertise in Forex Trading – long term and short term trading.

Short Term Trading (Scalp Trading)

Short-term trading, also known as scalp trading, is a well-known trading strategy that is characterized by short periods. It is fast, exciting, mind-rattling, all at once. This style of trading can only last for seconds to minutes. The main idea of this trading style is to take as many pips as you can throughout the time of the day wherein the market is the busiest.
Scalpers can have as much as a few hundred trades every day, aiming to acquire small profits. At the end of the trading day, all of the positions will be closed. Scalpers need to stay tuned in the charts, therefore, this style is only applicable to traders who can spend hours of uninterrupted trading. To be successful in this trading style, you need intense focus and fast thinking.

Long Term Trading (Position Trading)

Position Trading, on the other hand, is the longest term trading with trades that can go for as long as a few months to years. Position traders involve profiting from longer trends. Position trading resembles investing with the markets outside forex as the only difference they have. With position trading, you need a good understanding and patience as it goes for long and fundamental themes.
Additionally, with this type of trading, it is expected that your stop losses will become really large but your profit can also turn out to be huge. You must also ensure that you are well-capitalized or risk getting margin called.
The problems are expected to arise when the information processing systems of long and short term trading get mixed up. If they enter a trade with the use of a single set of parameters but end up using the information of the other information processing then the mix-up could hurt your trade. This is the reason why some traders tend to miss out on getting a good trade.

How to Avoid Mix-ups

One of the most effective ways to avoid mix-ups is to handle the trade through the use of the process used when locking your trade idea. Another way to avoid mixing the two types of trading is thru the use of detailed trading plans. Lack of confidence in your original plan is the reason why most traders get shaken up with small losses. But if you research more on Forex Trading and Forex Broker Germany, you will be confident with your game plan no matter what happens.

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