Important Trade Signals for Short-Term Traders

Hi Hernandez,
Short-term traders often aim for small to moderate gains, taking positions that can last from seconds to several days. They focus on price action, not the long-term fundamentals of an asset. If you want to trade short term, here are four signals to guide you.
Trend/Break out trading
Here, you enter a trade very early as you wait for the market to break out of a range. That way, you can determine the point where the market sentiment changes, which could signal volatility and the beginning of a new trend. You then ride the new trend to the end.




Reversal trading
In reverse trading, you identify when the current trend will begin changing direction and take advantage of the immediate price reversal. Whether downtrend or uptrend, a short-term trader can make quick profits out of it.



Momentum trading
A trader can opt to buy or sell assets depending on the strength of the recent upward or downward trend. They rely on the fact that a trend should continue for sometimes if the force behind it is strong enough. That is, if the price starts falling, it will keep falling as more people short-sells, further sending the prices even lower.




Support and Resistance/Range trading
In this method, you trade within the lines of support and resistance. For instance, you can trade long after a resistance breakout then put a stop order just below the resistance level.