Futures trading is a tool that allows traders to profit in the short term by using leverage to amplify returns and requiring less capital compared to spot market trading. However, short-term trading involves higher volatility and risk than long-term trading. Therefore, it is essential to develop suitable strategies and approaches for short-term profit.
Here are some useful strategies for short-term profit.
1. Choose an appropriate time frame.
Traders can select a time frame for trading through technical analysis platforms such as TradingView. For medium to long-term trading, time frames ranging from 4 to 24 hours are used. However, for short-term trading, time frames of 15 minutes to 1 hour are more suitable. The chosen time frame determines the length of candlesticks on the chart. It is recommended not to trade with time frames lower than 15 minutes as prices tend to fluctuate excessively.
2. Select suitable chart analysis tools
The most effective tool for analyzing charts in short-term time frames is price patterns. They reflect price changes quickly, making them suitable for short-term profit generation. On the other hand, indicators such as MACD and EMA, which are lagging indicators used to confirm trends, are less suitable for short-term trading. However, this is just an example, and traders should choose chart analysis tools that are appropriate for their trading style.
3. Assess your preparedness
Short-term trading requires a focus on market conditions and close monitoring of trading screens due to high price volatility. Traders who lack time to constantly track the market, such as those with full-time jobs, may not be suitable for short-term trading as they may miss important market movements and make costly trading mistakes. It is also crucial to understand one’s risk tolerance. If your risk tolerance is low, it is advisable not to engage in short-term trading.
4. Maintain high trading discipline
Besides using appropriate tools, maintaining high discipline in futures trading is crucial, and even more so in short-term trading than long-term investments. Short-term trading involves high volatility, and novice traders may lose focus and make mistakes, especially regarding stop-loss decisions. If one lacks the courage to exit trades and start afresh, they are more likely to experience losses and failures.
Experience is the most important factor for achieving success in short-term trading. Traders who survive in the market need to learn from their mistakes, adapt to market changes, including upward and downward trends, and navigate directionless markets. Therefore, rather than rushing to achieve quick success, it is better to focus on survival and use the experience gained to address specific trading issues.
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