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Many new traders make the same mistake: opening market software and immediately placing orders, fearing to miss any K-line fluctuations. Little do they know, this impatient mindset is the root cause of quick losses.
Where is the problem? Lack of patience and methodology. Watching price fluctuations makes them itchy to trade, but they don’t understand what they are waiting for or how to wait. Short-term trading requires not frequent trades, but precise timing.
**Four Key Points of Short-Term Trading:**
Focus on time frames — 1-minute, 5-minute, and 15-minute charts are the lifelines of short-term decision-making. Immediate price fluctuations directly impact the success rate of opening positions.
Tool specialization — Don’t greedily pile on indicators. 1-3 core tools like candlestick patterns, moving averages, and volume are enough. Too many can interfere with judgment.
Quick and decisive — Set profit targets at $3–$8, and strictly control stop-loss within $1–$3. Exit when it’s time, no sentimentality.
Time period selection — The London open is a high-volatility golden period, with ample liquidity and reasonable spreads, making it most suitable for short-term trades.
**Four Pitfall Avoidance Tips:**
Data event pre-5-minute zone — Before important data releases like Non-Farm Payrolls, CPI, spreads widen, and slippage occurs frequently. Trading at this time is like courting death.
Close positions immediately if loss exceeds $2 — "Holding on" is the biggest killer in short-term trading. Small losses can quickly turn into large ones in an instant.
Identify the overall trend — Even in short-term trading, glance at the 1-hour chart to determine trend. If the 1-hour EMA is upward, only go long; if downward, only go short. Don’t trade against the trend.
Limit daily trades — Don’t exceed 5 trades per day. Most of the time, stay out of the market and wait for high-probability opportunities rather than frequent operations.
**Mathematical Logic of Success:**
Short-term success rate is usually between 55%-65%. Seems not high? But the key is the risk-reward ratio. If you earn $5 and lose $3 each time, with a risk-reward ratio of 1.5:1, the compound effect over time can bring substantial returns.
It’s recommended that everyone first test their trading strategies repeatedly on demo accounts. Find your rhythm and rules before switching to real trading. Short-term trading is like dancing on the edge of a knife; only discipline is the true armor.