HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
Vantage information and reviews
Vantage
85%
XM information and reviews
XM
82%

All About Forex Day Trading


Day trading refers to the speculation on buying and selling a financial instrument within a single trading day and it is actually a very popular short-term trading strategy. The goal is to benefit from small movements in the price of stocks or currencies. Unlike scalping, forex day trading involves placing a single trade and closing it by the end of the day. It occurs in any marketplace although it is most commonly used in the foreign exchange and stock markets.

About day traders

With forex day trading, traders pick a side when the day starts and either make a profit or take a loss when the day ends. They are not into holding their trades overnight. In fact, they place intraday trades based on shorter-term charts, like 15-minute charts for example. Positions are managed in minutes or a few hours by using technical tools for exit and entry points. This way of trading requires traders to be focused and disciplined as the forex market is a fast-changing market.

Day traders are also well-informed on the markets and usually have a significant amount of funds as they make use of high amounts of leverage while using short-term trading strategies. This means that day traders are aware of events that lead to short-term moves in the market. This is also known as trading based on the news, which is a quite popular technique.

All in all, if you:

Then you might easily get into forex day trading.

Common characteristics found in a day trader

If you are a professional day trader, that is, you trade for a living and not as a hobby, then you must probably be well-established within the industry and have a deep knowledge of the market. As with any other type of trader, day traders share some common characteristics as outlined below:

Familiar with how the market works

If you don’t have a basic understanding of the factors that drive the financial markets, then you should probably not attempt to day trade as charts can often be deceiving. Skills like technical analysis or reading the charts are, therefore, very useful for a day trader. Conduct your research and be familiar with all the details around your trading products. Also, keep abreast of the latest market and economic news on which to base your trading decisions when the trading day starts.

Be well-funded

Day traders use funds that are used for high-risk or high-reward investments. This is also known as risk capital, and it is only what they can afford to lose. Also, to effectively capitalise on intraday price movements, access to sufficient capital is required. In fact, it is very important, as day traders use high amounts of leverage and there might be big margin calls triggered without much of a notice because of volatility.

Solid trading strategy

A day trader usually uses various trading strategies to have an advantage within the market. Then, they optimise them up to the point that they reduce losses and get the desired results.. Such strategies are:

How day trading works

Forex day trading is suitable for traders that have sufficient time to spend on analysing, executing and monitoring a trade within a trading day on the best online trading platform, the MT4. While scalping is quite fast and swing trading is rather slow, day trading is the ideal trading style if you are somewhere in the middle.

Traders have their expectations about interest rates, corporate earnings or economic statistics and when these expectations are exceeded or not met, then the market reacts in a sudden way, causing significant moves which day traders take advantage of.

More types of day trading

Trend trading

This strategy refers to looking at a longer time frame chart and determining a trade in general. After this, traders move to a smaller time frame so as to determine opportunities in the specific trend direction. Indicators can be used here to help traders with timing their entries.

Countertrend trading

This type of day trading is very similar to trend trading, only that when traders determine their overall trend, they seek opportunities in the opposite direction. The goal here is to quickly identify the end of a trend so as to be prepared when it reverses to open a position at the desired entry point. This strategy is quite riskier, as it involves going opposite of the trend, but can potentially bring successful results. It is also suitable for traders that are well-acquainted with recent price action and when to go against it.

#source


RELATED

MultiBank Group: Spot Bitcoin ETFs: Revolutionizing Cryptocurrency Investment Landscape

The emergence of Spot Bitcoin Exchange-Traded Funds (ETFs) marks a transformative phase in cryptocurrency investment. By offering a regulated pathway to Bitcoin's price movements...

Top 7 forex trading strategies in 2020

The foreign exchange (forex) market is a global marketplace where the participants exchange one national currency for another. According to Wikipedia...

What Is A Crypto Airdrop And How Does It Work?

You might have heard about crypto token airdrops as a popular way to get free cryptocurrency with little to no effort involved. In most cases, the offer of something free...

High Frequency Trading (HFT) in the World of Retail Trading

High Frequency Trading, better known by its acronym HFT, is a buzzword in the forex trading industry. As the world of trading evolves with the rise of technology, the line between large institutional traders...

Benefits of Becoming a Signal Provider for Copy Trading

As a trader, you may be asking yourself if becoming a signal provider is right for you. Many new traders turn to copy trading as a way to learn from more...

Which Citizenship by Investment Programs are Crypto-Friendly?

With the evolution of the digital era, the crypto industry has taken the world by storm. In most countries, digital assets are considered a commodity rather than currency...

What is the Metaverse? The future of the internet

When Mark Zuckerberg announced that he’s turning Facebook into a metaverse company and changed the company's name to Meta, the metaverse quickly became...

How to stake Ethereum

Ethereum is switching into a proof-of-stake consensus to allow the network to achieve scalability. Ethereum staking is when people lock up Ether (ETH) for a given time...

A Comprehensive Guide to Oil Trading: Strategies, Factors, and Techniques

Oil, a vital and highly valued commodity, plays a pivotal role in numerous industries worldwide. This non-renewable energy resource exists in various forms, with crude oil being the most prominent...

Commodity Trading and its Role in Energy Transition

The global energy landscape is rapidly transforming, driven by the need for sustainable and cleaner energy sources. The challenges of this energy transition are vast and complex...

Emerging markets: an intriguing niche

Emerging markets are the countries that possess some characteristics of a fully developed market but do not have enough to be...

Is MetaTrader 4 good for Crypto?

MetaTrader 4 is used to trade a variety of financial instruments including some of the world’s most popular cryptocurrencies. In this blog, we’ll look at the benefits of using MT4 for crypto trading...

Forex Trading: A Comprehensive Guide

In the realm of global finance, several markets and assets beckon traders. Among these, the Forex market stands out, offering unique opportunities and challenges...

Telcoin: The Future of the Dark Horse of Cryptos

The cryptocurrency world famously has its ups and downs, and May 19 was not a good day. However, investors remain optimistic. Most cryptocurrencies already bounced...

The Relationship between Gold and the USD

If you have been reading our research articles, you must have seen that our analysts very often talk about the negative correlation between gold and the US dollar...

What Buffett and Berkshire Hathaway do in COVID-19 crisis?

Over the course of several decades, Warren Buffett has been taking the investment approach that has made Berkshire Hathaway the sixth largest company...

Demystifying ECN and STP Trading: A Comprehensive Overview

When setting foot in the trading realm, the first, and perhaps most significant, decision lies in selecting the right broker. The trading platform you choose will serve as your constant ally...

Some things you need to know about investing in cryptocurrency

Whether you have thought about investing in cryptocurrency for a long time or it is an idea that sprang up recently, there are some things you should know before getting started...

Different ways of investing in gold in these modern times

Gold is a bright, yellow, malleable and ductile metal found in nature. It is usually found in rock veins, gold nuggets, grains, electrum or alluvial gold...

What is Equity Trading?

Trading on equity refers to the buying and selling of stocks or corporate shares, usually referred to as equities, on the financial market. Investing in shares may be done in a few different ways...

FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%
FXNovus information and reviews
FXNovus
75%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.