And your timeframe is Daily and above. You can do it on a daily timeframe or even a weekly timeframe. This is a trending market actually, and I've done backtesting on it. This market had an accumulation stage where it pretty much broke out of this resistance and it started trending:. But as a position trader, this is where you can capture a trend. This is where a position trader can ride the entire huge move in the market. It can be done in less than an hour a day. Because you're trading off the higher timeframe like the Daily or even the Weekly.

You don't need much time. It also probably doesn't interfere with your full-time job, so there's really not much stress. That's pretty much it. And you also have to be comfortable watching your winners become losers because the market could breakout. You're in the money and it does a sudden reversal, becomes a false break down to hit your trailing stop loss, and you get stopped out for a loss. It's very common to have your winners become losers. This is the truth. For traders who have been trading for a while now, this trading style that you can consider is what I call transition trading.

The way transition trading works is that you get your bias on the higher timeframe, but you time your entries on the lower timeframe just like a day trader. But if the trade or the market condition makes sense and the trade goes in your favor, you can manage your trades on a higher timeframe.

I'll give you an example later. Let's say you had a shorting opportunity at this previous support now turned resistance, so you went short on this price reject:. Bear in mind that since you're entering your trades on the lower timeframe, your stops are also based on the lower timeframe.

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Let's say you went short over here with stop loss 1 ATR from the recent high:. Your stop loss is like 10 to 12 pips. In this case, the market pretty much went in your favor and it went all the way down. Most probably a lot of traders will not be able to do swallow that retracement. One tip to share with you is that as a transition trader, let's say you short 1 lot, you don't want to hold onto that 1 lot and watch your equity curve go up and down for that full 1 lot, because it's going to be a roller coaster ride.

This is why when the market moves in your favor, one-to-one risk-reward ratio, you would exit a third or half your position. For example, let's say you went short at this point and you have a one-to-one risk-to-reward trade:. You have the remaining half riding. And this remaining half, you could be trailing it or managing it on a higher timeframe.

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Like for example, on the higher timeframe, price is approaching this swing low over here where you can take profit on the last remaining half:. Can you see how transition trading works? You time your entries on the lower timeframe and if conditions permit, market moves in your favor, you can use the higher timeframe to take profits. This gives you a very favorable risk-to-reward on your trade. And that's what transition trading is all about.

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You can achieve insane risk-reward on your trade, possibly 1 to 10 or more. The downside is that most trades will amount to nothing. You hit your one-to-one, take profit on half of the position but the remaining half will just get stopped out at breakeven or for a loss. Most trades are like scratch trades, with small wins and small losses amounting to nothing.

But there are those few trades which will really make a huge difference to your bottom line. And another thing is that it's mainly for experienced traders because you can see that you are utilizing multiple timeframes analysis.

For example, this is combining day trading and swing trading together to give you this transition trading. There's a difference. If you want to grow your wealth in the markets you can adopt a swing or position trading approach. But if you want to make an income that's where you need to look at day trading or transition trading. If you want more action in the market but at the same time, you don't want to be glued to the screen, then swing trading. If you want to do it full-time, then day trading is for you. For example, in position trading, it's awesome to ride big trends.

But maybe you're not suited to ride trends because you're not comfortable watching your winners become losers, you feel a lot of pain when winners become losers. And if you feel a lot of pain, then you might consider swing trading where you just look to capture one swing in the markets. Ask yourself, does the strategy suit you? Do you exert a lot of mental capital?

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Do you feel a lot of pain psychologically when you execute a strategy? If it doesn't really hurt you, if there's really not much pain, then that strategy probably is for you. But if you feel a lot of pain, that strategy clearly isn't for you. So let's get started Day trading As a day trader, your goal is to capture the intraday volatility. As a day trader, you typically trade off the Minutes timeframe and below. That's pretty much the most that you can handle at any one time Let me explain to you how capturing the intraday volatility by getting your bias on the higher timeframe works.

The market is at this area of resistance grey area , and you have multiple price rejection in this area of resistance: This gives you a bias as a day trader, so you don't want to be long at this point in time. Look at the upper wicks over here: Using this information that you have, you want to short the markets. Or maybe you can look for a retest of previous support turned resistance: This could be another opportunity to short.

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And they usually get out their trade before the session ends for the day. This is what intraday trading is about, for the Forex markets at least. This is why you can make money in most months. Cons: The downside is that day trading can be stressful. And another thing to consider is that there are high opportunity costs in day trading. Don't forget to take into consideration the opportunity cost as well.

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Moving on Swing trading As a swing trader , what you're trying to do is to capture one swing in the market. As a swing trader, your goal is just to capture that one swing in this trending market: Your goal is just to capture that one swing. Now, how do you know ahead of time when this trending move is about to reverse? Let me explain to you how these numbers come about. Now here's the thing… Which level do you pay attention to?

If you look at the chart, sellers could possibly come in within this area where previous support could become resistance: This is a possible area to look to capture one swing in the market. Cons: You won't be able to ride trends because as a swing trader, you're just going to keep trading one swing. Moving on… Position trading What is position trading?

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Pros: It can be done in less than an hour a day. Cons: The downside is there's a low number of trades because you don't get trading setups often. Let's say you had a shorting opportunity at this previous support now turned resistance, so you went short on this price reject: Bear in mind that since you're entering your trades on the lower timeframe, your stops are also based on the lower timeframe.

Let's say you went short over here with stop loss 1 ATR from the recent high: Your stop loss is like 10 to 12 pips. This could be a move that could play out really well. For example, let's say you went short at this point and you have a one-to-one risk-to-reward trade: You have the remaining half riding. Like for example, on the higher timeframe, price is approaching this swing low over here where you can take profit on the last remaining half: Can you see how transition trading works?

Pros: You can achieve insane risk-reward on your trade, possibly 1 to 10 or more. Cons: The downside is that most trades will amount to nothing. Which is the right trading strategy for you The first question to ask yourself is: 1. Do you want to grow your wealth or do you want to make an income from trading? How much time can you devote to trading?