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Co-Wise: How did you start short-term trading?
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Mars Mooo joined discussion · Dec 10, 2021 22:36

Starting short-term trading soon?

Welcome Mooers!

This week's topic, we will be discussing 'How do we start short-term trading?'. We will focus on 4 main points.


Point 1: Who do we want to be?

There are 3 kinds of short-term traders. They are:
1. Scalpers
2. Day traders
3. Swing traders

A scalpers aim to profit from a position that last not longer than 10 minutes. Unlike scalpers, day traders trade within a single day while swing traders can have position that last from several days to weeks.


Point 2: What markets we are comfortable with?

The two most popular markets among short-term traders are Forex and Cryptocurrencies.

In Forex, currency pairs such as $USD/EUR (USDEUR.FX)$, $USD/GBP (USDGBP.FX)$, $EUR/USD (EURUSD.FX)$, $GBP/USD (GBPUSD.FX)$ are available 24 hours every business day. However, new generation (Gen Z) prefers trading in cryptocurrencies (e.g. $Bitcoin (BTC.CC)$ , $Ethereum (ETH.CC)$ , $Dogecoin (DOGE.CC)$ , $Zilliqa (ZIL.CC)$ ) as it is open 24/7 and can generate very impressive high returns.


Point 3: Which strategies that we want to use?

There are many trading strategies that we can use for our short-term trading. The most popular one is the momentum trading as it takes advantage of market volatility by open position in stocks that is going up and sell them when they are about to go down.

As for the risk, we use sell stops and buy stops to protect us against market reversals.

To know when to buy and sell at the possible right time, we can look at a few indicators such as Moving Averages (MA) and Average Directional Movement (ADX).

The One of the patterns that I like best is the Cup and Handle. The Cup and Handle resembles a cup with a handle. We can identify the cup as a shape of 'u' and the handle has a slight downward drift. The Cup and Handle pattern signal bullish.

An example of Cup and Handle pattern can be illustrate by $Imperial Oil (IMO.US)$ , as shown below.
Starting short-term trading soon?
Point 4: Finding the Brokers with as many useful features as possible.

To perform our short-term trade, we will need broker who can offer fast execution speed so that our trade are filled as soon as possible. Beside fast execution speed, we would like our trading cost to be keep as minimum as possible. We also will need a broker that can offer a wide range of products and services to meet the different traders & investors needs.

$Futu Holdings Ltd (FUTU.US)$ MooMoo have been a wonderful online broker that provides:
1. Fast execution speed
2. Low trading cost
3. User-friendly community
4. Interest on cash balance (expected to be available in December 2021) *
5. Re-launching of Treasures Box event *
6. Fractional tradings (to be available in Q2/Q3 2022) *
7. and many more.

* More information can be found here.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only. Read more
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Mars Mooo
To the Mars and Mooooo.... 🚀
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