SYNTHETIC INDICES: TRADERS IN SYNTHETIC INDICES MARKETS

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 SYNTHETIC INDICES: TRADERS IN SYNTHETIC INDICES MARKETS 


SYNTHETIC INDICES: TRADERS IN SYNTHETIC INDICES MARKETS 

Just like in every financial market, profitable trading in Boom and Crash markets comes with its
own set of rules which must be obeyed. Flexible adherence to these rules makes trading
enjoyable and easy.
 
 
One of the basic ways in which the market communicates what it is doing is by helping us realize
the kind of trading concepts in which market participants (the bears and bulls) is about to
resume. To understand this, the secret lies in time frame observations and combinations.
 
Understanding time frame combinations is a great way to becoming a consistent and profitable
trader in the financial market. This is because different time frames were made for different
traders to use for analysis, entry and exit. In other words, different kind of traders do not focus
on the same time frame for their analysis, entry and exit.

 
Once a trader knows what a particular time frame is saying, such a trader can intelligently follow
the market from its inception to where it is actually heading to without having the FOMO (fear
of missing out) feeling. This is because such a trader will be able to predict where directional
price movement will begin and end.
 
To understand this, it is good to highlight that market participants (the bulls and bears) will make
or help price to move in the following concepts using different timeframes. 

1. Position trading

 A position trader is a type of trader that is very patient and exercises a
high level of emotional control. He/she may not be easily moved by the swing moves of
price as they look beyond temporary price fluctuations and pullback. Position traders
usually focus on a getting a bigger picture of the market. This enables them to see the big
moves in which price is yet to make and focus their analysis from that timeframe of
focus. Position traders focus their market analysis from the monthly timeframe and
observe a structural alignment in the weekly and then make entries or exit using the daily
timeframe. Position traders have no business with timeframes lower than the daily since
their trades usually run from weeks to months.

 
1. Swing trading

A swing trader is also a patient kind of trader with an enormous level of
emotional control. They use the weekly timeframe as their primary timeframe of focus
and observe a structural alignment in the daily and then make entries or exit using the
hourly timeframe. Swing traders have no business with timeframes lower than the hourly.
Swing traders usually do not have more than three (3) favorite assets just like position traders.
They focus all their energy to study, compare and take personal lessons on their favorite
assets. Swing trading just like position trading usually leads to swap (a little commission
in which your broker takes from your open position when it runs into a new trading day).

1. Day trading

 A day trader is a person whose trading position begins and end within 24
hours. They do not allow their trades to run into a new trading day. Hence, they avoid
swap. Day traders usually take quite a few open positions and have not-so-much assets to
trade per day. In other words, day trader usually keeps their eyes on 4 to 5 favorite
assets per time. They focus on the daily timeframe as the primary timeframe while the
hourly timeframe is used for their structural alignment. Entries and exit are usually being
taken on M30 timeframe. Day traders may or may not make indicators their absolute ally.
Rather they may see indicators are confirmatory tools for trading just like position and
swing traders.
 
1. Scalp trading

A scalper is what I usually call a busy trader. I call him so because he/she
is the busiest kind of trader in the financial market. He focuses enormous amount of
energy and time on the charts. This is because he does not allow an open position to run
for too long. And for this reason, he is known to take multiple trading positions per
trading day. Scalpers may usually practice the habit of switching from one market to
another to search for opportunities and they are usually they most impatient kind of
traders. For this reason, they can trade as many as ten (10) different markets in a day with
multiple positions. To add to this, scalpers are masters of indicators since they have little
to no thinking time. 

They rather allow their indicators to do most of the thinking for
them. I have to note here that scalping is a very dangerous adventure for beginner traders.
Only professional traders really know how to go about the scalping business profitably.

For beginner traders who begins the trading adventure as scalpers, they usually end up as
culprits of deceit and scam since they are always seeking for a holy grail strategy.
To understand the relevance of this topic, a trader needs to know a specific time frame in which
he can draw analysis from. 

This is because, what price says in each specific timeframe is very
important. For instant, looking at Boom 1000, it is obvious that the price is on an uptrend.
However, when the monthly timeframe is being considered, one will observe that there is a
rejection pin bar candlestick formation. For that reason, we have the weekly and daily
retracement or pullback that has existed for more than two weeks now. Having known that
B1000 is on an uptrend, a good look at the monthly candlestick gave a retracement signal in
which the weekly and daily is playing out perfectly. For more details, kindly watch the attached
video in this publication.

ADVANTAGES OF UNDERSTANDING TIME FRAME COMBINATIONS

1. It enables a trader to know what the price is doing in a specific time frame
2. This is to help traders have precise periods of analysis, entries and exits.
3. It helps a trader to avoid FOMO (fear of missing out)
4. It helps a trader to know his/her limits and become contented
And there are no disadvantages to staying where you know you can trade successfully……

N/B: information provided in this material is given out of personal observation and study of each
of these assets, their uniqueness, differences in the volatility rate and price movement. For now,

references are not included in the study because readable assets on synthetic indices is rather
very rare to come by.


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