Quality day trading recommendations? Bollinger Bands are an indicator invented by market technician John Bollinger in the 1980s. They are a versatile yet straightforward tool to get a lot of information in one glance. Bollinger Bands are composed of 3 lines. The middle line is a simple moving average, while the lower and upper bands are standard deviations. In statistics, the standard deviation measures the dataset’s dispersion relative to its mean. For Bollinger Bands, traders typically use a 20-period moving average and 2 standard deviations. In statistics, 2 standard deviations should capture 95% of the dataset if the data is normally distributed. Like other indicators on our list, Bollinger Bands aren’t a trading system. They’re one of the tools for observing the volatility, often playing a part in the breakout or mean reversion trading systems. Yet, the most helpful concept around the Bollinger Bands is the band squeeze – an early warning sign of incoming volatility.
There are several unspoken rules for day trading. The first one concerns opening and closing trades around the weekend. Day traders skip the first two hours of the European trading session on Monday. After the weekend, the Forex market may open with a price gap: traders are just starting their analysis and outlining their weekly plans. The first hours of Monday are the least predictable time, but after that the financial market enters its usual operation. The same concerns Friday. Before the weekend, in the last hours, trades are being closed massively in order to avoid swaps and fundamental risks. See extra information on https://www.litefinance.com/blog/for-beginners/day-trading-guide/.
The moving average convergence divergence, or MACD, is an oscillating indicator that fluctuates around zero, and is a measure of both trend and momentum. The calculation of the MACD follows the same logic as a simple moving average, but incorporates additional features to give a better picture of a more recent moving average compared to an older one. When the MACD crosses over into positive territory it is seen as a buy signal, and the opposite holds for negative territory. The MACD is usually used as a complement for other technical indicators, and not as a stand-alone indicator in trend trading.
Day trading is the act of buying and selling a financial instrument within the same day or even multiple times over the course of a day. Taking advantage of small price moves can be a lucrative game if it is played correctly. Yet, it can be dangerous for beginners and anyone else who doesn’t adhere to a well-thought-out strategy. Not all brokers are suited for the high volume of trades day trading generates. On the other hand, some fit perfectly with day traders. Check out our list of the best brokers for day trading for those that accommodate individuals who would like to day trade. Below, we’ll take a look at ten day trading strategies for beginners. Then, we’ll consider when to buy and sell, basic charts and patterns, and how to limit losses. Find more details at https://www.litefinance.com/.
You can take advantage of the 60-minute time frame in this Forex strategy. The most suitable currency pairs to trade using this Forex strategy are the EUR/USD, USD/JPY, GBP/USD, and the AUD/USD. In regards to the Forex trading strategies resources used for this type of strategy, the MACD is the most suitable which is available on both MetaTrader 4 and MetaTrader 5. You can enter a long position when the MACD histogram goes above the zero line. The stop loss could be placed at a recent swing low. Sell Trade Rules: You can enter a short position when the MACD histogram goes below the zero line. The stop loss could be placed at a recent swing high. Below is an hourly chart of the AUDUSD. The red lines represent scenarios where the MACD histogram has gone above and below the zero line: Forex 1-Hour Trading Strategy metatrader 4Source: Litefinances MetaTrader 4, AUDUSD, H1 chart (between 20 May 2020 to 31 May 2020). Accessed: 27 April 2022 at 11:45 am BST – Please note: Past performance is not a reliable indicator of future results or future performance.