In many ways this article ought to come, like a pack of cigarettes, with a health warning! This is because day trading, meaning opening and closing trades on the same day involves far greater risk than a more long-term strategy.? An experienced trader will by and large shy away from day trading and probably won?t need to come to a website for suggestions.
There is after all a limit as to how far a market can go in one day. That in turn means that in order to make a profit on the day (which is after all the name of the game) greater risks need to be taken.? Day trading involves a lot of action and requires attendance at the trading station while the session is proceeding. The narrower the time frame, the greater the risk.
There are two factors which any intraday trader must regard as essential volatility and liquidity.This applies to every trader on Forex but especially to those trading in the short term.
When trading short-term, you must have solid volatility. This basically reduces the selection of instruments to the major currency pairs and a few cross pairs, depending on the sessions. Speaking of sessions, since volatility is session dependent it is really important to know when is the right time to trade as well as what you should be trading.
It is crucial to maintain liquidity in intraday trading.? You can?t afford ? literally to throw away the odd 10 pips because that could be all your projected profit from that trade.? Whilst there is skill involved, if there is no liquidity, you won?t get your orders closing at the price you want, however skilful you may be. Intraday traders are thus limited by instruments and by trading times.
Among the techniques that have evolved to service intraday trading, one celebrated one is scalping. This aims to make many small profits on very small price changes. Scalpers really go for quantity trades, playing their hunches and hoping for success.? Then there is reverse trading ? trading against the trend ? and momentum trading which seeks out strong price moves paired with high volumes and trading in the direction of the move.
However the fairest summary is that the rookie trader should exercise patience and think long term to build real profit.