The main secret of the short-term trading.
The secret is the less you make trades, the less you earn.
Sad indeed, but the way it is. Think about the investment you've ever done. Do you ever get the job done in a day? If yes, then you are lucky, and how many times you can do it again? No doubt about it, rarely. That is because the universal rules of speculation is the same with the universal rules of growth.
We need time to improve profitability.
Successful traders know that in a minute the market can move a little, and within five minutes of the market will move even further, and within 60 minutes will be added much more, and who knows how far the market will move in a day or week. Traders who fail to appear only enter into trading in the short time frame, which automatically narrow the opportunities they make a profit.
Thus they deliberately restrict benefits and suffer losses that are not measurable. No wonder so many are getting bad results in the short-term trading. They have locked themselves in a futile situation, thinking that it is still possible to make money in a single day just by following the increase and decrease in the market. And this theory seems quite rational, because when you make trades in a day and never leave an open position overnight, you do not rely on events and major changes, so that narrow the risk that you are facing. And this is actually inaccurate, since the two following reasons.
First, your risks are in your control. The only control you have in this business is the control of stop-loss points - points where the position is closed. Yes, there is the possibility that the market will be opened on the next morning with a stop gap that exceeds your (slightly beyond the stop you), although cases like this rarely happens, however, you can limit your losses, have a stop-loss points and ended with a losing deal . The loser continues to suffer losses, not the case with the winners.
Immediately after you set the position with stop-loss points, you could lose some money. Without reference to the time when you opened the position, since your stop-loss points to limit your risk. You risk the same as when you buy the high points in the market or the low points in the market all the time.
Do not want to set a position overnight would limit the amount of time that causes the growth of investment. Sometimes, even though the market could be opened again for us, we still remain in the right direction, because the market will be opened for us.
And more importantly, when you end the trading at the end of the day, or even worse in a few moments before the closing, say at intervals of 5 or 10 minutes, then you will narrow down your potential profits radically. Remember when I mentioned the one big difference between winners and losers, the losers continue to suffer losses? Well, another difference is that winners keep winning position, when the losers leave the market too quickly. Because for the loser, they did not wait for the position of victory: they were quite happy to have been making a profit so they are out of the market too quickly (mostly during the day).
You can never make much money until you learn how to continue in the position of victory. And the longer you stay, the greater the profit potential you have. When farmers sow the seeds, they do not see these plants every five minutes to find out how these plants grow. They let the plants grow and flourish. Traders can learn from these natural processes. Trader's success did not differ much with the success of farmers. In order to get a deal on a successful trader also takes time.