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If your trading decisions are
based on a technical analysis of a price chart, you must use a specific time
frame in which your system or methodology will provide buy and sell signals.
You must be consistent with using the same time frame for all your trading
decisions as your projected profit targets and stop loss orders will be
based on a price action on a price chart in your chosen time frame. Your
choice of a time frame and trading style should suit your personality and
circumstances. Basically there are three approaches to trading, each using
different operating time frames. This are:
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Position trading
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Short term trading
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Day trading
You must remember that the
shorter is your trading time frame the more buy and sell signals you will
have so the overall running costs of your business will go up because of a
higher number of commissions you will have to pay to your broker. Also, the
shorter is your trading time frame the more time you will have to commit for
your trading activities but you will have more trading opportunities so you
will generate higher business turnover and possible higher returns.
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