Combining short with Long Term Trading

Beginner Questions
1

Yesterday I done a simple system-less trade on a demo-account to become
more familiar with forex.

I started of with a 15 minute chart. I went long and the trade went in my
favour, bullish. I made a quite few pips. I then set a tail stop-loss( I think you call it that) so worst possible scenario, I still gain on the trade.

Then I moved to a 60 minute chart set some basic indicators and lowered my stop-loss to cater for noise. From this stage of trade if markets went bearish , I would not have lost on the trade as I would have only lost most of the trade I made on the 15 minute chart trade.

I believe that if I had jumped strait to long term trade, I would have to lower my stop loss too low ,to cater for market noise, risking losing a lot of pips. If I had set it too high frequencies of losses would increase, incurring spread penalties for all these mini trade transactions.

The basic idea is to only start a trade when long term trends are bullish but
also when short term indication make it possible to make gains short term to cover any potentual loss when I go back to long term charts.

I hope my English is good

2

Its quite a common strategy managing trades on increasingy longer timeframes.

One of the guys posting here Graviton advocates something similar, and I think he might have given a few hints and tips about how he manages these types of trades in his thread.

You might also want to check out some of Cynthia Kase’s ideas based on this technique. If your not familiar with Cynthia’s work I can reccommend checking out some of her webinars, she’s one of the few authors out there who actually seams to understands technical analysis !

3

To go along with what Simbafx says, in my view, every trade has longer term implications.

For me, every trade starts as a scalp until it proves itself.

It’s more then fine to use signals from a very short term time frame, and then base your trade management on how it responds.

I don’t advocate using trailing stops, but if it’s working for you, great!

4

The key is to develop a short time trade into a long trade. To do that yo need to know first in what part of the bigger trend you are. So first you need to take a look at the bigger timframes, in my case i like to watch the daily chart and see if the trend is up or down. The i take a look at the 4H chart and wait for a retracement. At the moment of the retracemen i switch to 1H or 30 min chart to get a cheap entry. I get stopped out a couple fo times before jumping in the big wave. This only happens few times a week, but are trades that give you the more money.

5

I know that a few traders would come up with something. It just seem like
a good idea. It reduces risk and I don’t think there are any drawbacks