The daily time frame trading technique is often considered to be the most boring trading strategy. In fact, the novice traders always try to find quality trades in the lower time frame. In a nutshell, they want to scalp the market to secure a quick profit. But do you really thinking scalping the market is a good way to develop your trading career? The simple answer is no. It’s true that many professionals are using a scalping strategy to live their life but being a new trader it will be really hard. In fact, you will be under extreme pressure most of the time. So it’s better to trade the higher time frame since it will help you to execute a trade with an extreme level of confidence.
About RSI indicators
Before you learn to trade the daily time frame, you need to understand about the RSI indicators. RSI refers to relative strength index and it’s a very popular indicator. Starting from the novice end with the professional traders, everyone uses it to find the overbought and oversold condition of a certain asset. It acts more like a trade filter tool. For instance, if you spot any bullish reversal signal in the daily time frame, you can easily look at the RSI indicators reading to assess the quality of a trade.
Understanding the reading of the RSI
There are two basic things you need to consider when you analyze the RSI indicators reading. If the value of the RSI reading stays near or below the 30 marks, you need to consider the reading as a buy signal. It’s more like the market is in an oversold condition. On the contrary, if the value of the RSI reading stays near the 80 mark consider it as an overbought condition. You need to look for sell signals. Reading the RSI value is fairly easy. Some of the novice traders often make things worse by using in the lower time frame. Always make sure you use the indicator reading in the daily or weekly time frame to get the very best trade setups.
Though Forex trading Singapore is a very popular profession, every few traders actually understand the proper way to use the RSI indicators. This is not a big problem since you can use the Saxo demo account to learn to trade. Try to trade in a different time frame in the demo account and see how the indicators react to the price movement of a certain asset.
Executing the trades
Trade executions based on RSI reading is fairly easy. To do so, you must have a balanced trading strategy. Consider the RSI indicator as trade filter tools. Never think you can make a huge profit just executing the trades based on the indicators reading. You need to use other important parameters like support and resistance level. As a novice trader, use the demo account to create a balanced trading strategy. The starting of your trading career will be a little bit boring since you will have to lose many trades. Losing doesn’t really matter since you will be learning in the demo account. Once you feel confident with your trading strategy switch back to the real account.
Developing your mental stability
Mental stability plays a great role when it comes to the trading business. You can’t make the best division by executing the trades under stress. You need to control your greed and minimize your risk exposure at any cost. At times you might feel frustrated with your trading result but this is absolutely normal. Take a small break and try to rephrase your mindset so that you can find the best trades. Since you will be trading the market with an indicator based trading system, make sure you keep your trading chart clean. Never use more than two indicators because it will make things worse. Most importantly, you will get confused by seeing the different readings of the indicators.