Scalping or Trend riding
Topic: Scalping or Trend riding
What is your opinion of scalping vs trend riding? Has one or the other been more successful?
I personally feel that scalping is best done by EA's, humans are ok but, the software is much much faster and doesn't break the rules based on emotional investment.
In manual trading I find the best way to make money is playing trend reversals.
First you have to Identify a trend, doesn't matter up or down.
Now that you know there is a trend, you figure out when is the most likely point of trend reversal.
You can do this many ways. I suggest using some helpful indicators. Such as parabolic sar, exponential moving averages, drawing your price levels for supports and resistances, drawing your trend lines to identify known patterns that could indicate a trend reversal or continuation, and especially, fibonacci replacements levels.
Before entering a trade, have your risk management in place. In considering risk management, take into account your balance, how much you are willing to risk or lose worst case, as well as how much you feel would be a decent profit.
After identifying a trend, using indicators and chart drawing analysis to identify possible reversal levels, I then wait for at least 2 sometimes 3 confirmation signals of the reversal or continuation of the trend. Once such confirmation could be the changing of dots on the parabolic sar, another could be the crossing of a sma over the ema, and as well as candle stick analysis(patterns as well as signal candle formation).
I believe this is a decent basis for a strategy in manual trend trading.