Thursday, August 19, 2010

Choosing trading style


In technical analysis we have different trading style which all vary depending how much time you will spend for trading. There are a lot of different trading styles but we can form three main categories.

Short term


Short term trading in stock markets means that positions are usually held from one day to several days. Shorter time frames are used for technical analysis of stock or currency pairs. In forex markets it means holding position from a few seconds to maximum one hour. In stock market timeframes used for short term trading are usually five and ten minutes up to thirty minutes or one hour.

Medium term 


Medium term position in forex markets are held for duration from a few minutes to a few hours. In stock market it means holding a stock from one day up to a week. Time frames used for medium term trading are one, two hours and up to one day time frame.

Long term


Long term trading in forex markets means holding position for weeks or months. Its is based on macroeconomic events. There is a lot of volatility and price fluctuations. In stock market it means investing like Warren Buffet. If you are a long time investor you hold your stock for weeks and months. Time frames used for long term trading are weekly and monthly time frames.

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