A Guide to Forex Day Trading Strategies
Day Trading is a type of Forex trading that expires within the same day it was placed. It is based on small, short-term price fluctuations, which means that the rates fluctuate from day to day and within the day. While many forex trades expire in a long time, some traders opt for day trading because it leads to short-term profit.
This guide will help you look into strategies that successful Forex traders use while incorporating your unique trading strategy. With the use of this guide, you can opt to increase your profit while setting a stop loss and a take profit limit.
Of course, every trader’s goal in forex trading is to earn profit from his or her trades. By setting a stop loss, you will determine the risk to take in your day trading. This will help you calculate the amount of money you can lose if your trade does not go in your favor. On the other hand, a take profit will help you assure gains in business.
As you read through this guide, carefully note each detail. You must remember that with substantial knowledge in trading and a well-thought-out strategy, you can make your trades profitable.
A 3-Step Guide to Forex Day Trading
This step by step guide will allow both novice and experienced Forex traders to quickly and easily plan their Day Trading strategy.
- Know Your Currency Pairs
As a trader, you need to know which currency pairs you want to trade. Different currency pairs have different rise and fall values, which is why it is essential to know which currency pair will most likely earn you profit.
One of the ways of how successful Forex traders choose the currency pair they trade is by attempting to predict data results released by major countries in line with their economic calendars.
An economic calendar is the scheduled date of releases and events that will significantly affect the market as a whole. Major countries announce their respective market updates and performances. These updates often change the course of the trading market.
- Determine Trade Expiry
Since Day Trading expires within the day, as a trader you will need to carefully select which Forex trade you want to place by considering its expiry.
You have the option to place trades that last for seconds or minutes or a day. With that in mind, you can determine how long you want your trades to be live and active.
While many traders opt for long-expiry trades, you can make a quick profit in a 30-second or a 45-second trade. This is even more probable after major countries release their economic data.
- Set Your STOP LOSS (SL) and TAKE PROFIT (TP)
When you trade Forex via a web platform or a mobile trading platform, one important thing to keep in mind is to set a stop loss and a take profit. These two will limit your damages and ensure profit, respectively. You must take note that these factors depend on your actual trading budget.
When you set your stop-loss limit, you can base it on the financial value of each trade you place. Since there are no rules in setting stop loss and take profit, you can decide it for yourself by considering the rate fluctuations. You can opt to minimize your stop loss to 30 or 40 pips (point in percentage). However, this is all up to how much you can risk.
The same goes for the take profit. You can set it up to 30 or 40 pips, as an example, and opt to close a trade when you reach your take profit limit. This will help ensure earnings in the business.
However, if your trading budget drops, stop trading and mark it as a losing trade.
Using this 3-step guide of strategies to Forex Day Trading, you can ensure your gains and minimize your losses. Remember that proficiency in trading and a well-thought-out plan leads to profits.