High Frequency Online Trading

The benefits of online trading can be enhanced when one trades at high frequency, or at least they partially extend their methods to high frequency trading.

Traders Find High Frequency Online Trading More Exciting

This is perhaps the most difficult kind of online trading, as it goes beyond even day-trading and forex news trading. Trading through a good forex broker is key, in order to be successful. High frequency means that one would have to trade almost like a scalper during some hours of the day, and like a selective day-trader during other hours. The benefits of high frequency trading is that the trader is able to profit much more than they otherwise would. So that even though the market moves say 60 pips overall for the day, the intra-day fluctuations are so many, that may add up to 100s of pips. And at least 30% of these fluctuations can be traded. These traders have different criteria for each day, and they attempt to make several $100s at least on each one. They also know which losing trades to keep open, and for how long. This is very difficult to do, but it allows them to achieve that high profitability for the day, without employing low risk to reward ratios in their trades. In fact they use high ratios, which means they are willing to risk say 100 pips to make just 10. Low risk reward ratios mean using large stop loss orders, and carrying some open losses through the day. But the probability of these losing trades coming back to break even or partial profit levels, is extremely high! Hence the $100s in daily profits is actually a realistic goal, but it requires many hours of devotion and nerves of steel, which few possess.

Known Volatility is Every High Frequency Trader’s Friend

Volatility is hard to accurately time, but generally the high frequency trader is looking for range bound trading hours. Hours when the currency pair in question will trade between some trendlines, simply going up and then down. The use of a forex calculator for figuring out LSS pivots for the day and stop loss levels is critical. Trading at high frequency means that there is not the luxury of time, and still all these numbers have to be calculated accurately. High frequency online trading is among the most difficult types of trading, in fact it cannot be taught at all. If a trader has such a skill they have learned it all by themselves. It’s something that comes naturally. Volatility alone is a very tough factor to assess, and the use of global forex time zones and LSS pivot levels and news are only the first clues one would have to use. A currency pair can still defy all these so that it trades within a range for a while but it suddenly goes out of that range and trends with momentum in one direction. That’s where most traders attempting high frequency trading and scalping lose most.