Day trading in the Forex market, is all about trading currencies within the same trading day. Forex traders using these types of strategies will place orders, hold open positions and close them all within the same day. An example of a common day trading strategy is scalping. The Forex traders who use these types of trading strategies are often referred to as day traders, but they are also sometimes known as active traders. There are many different day trading strategies, but none of them are particularly ideal, especially for beginners.
The main reason why Forex day trading strategies are not ideal, is that they rely merely on short-term currency pair price volatility.
Longer-term Forex traders will conduct fundamental and technical analysis, in order to search for and discover potentially profitable trends and patterns. They will then find good points of entry and place their orders. They will wait for their trades to become profitable for some time (with some currency traders holding open positions for years). Some Forex traders might use take-profit stops, but longer-term traders will usually use trailing stops to let their profits run and their trades grow in value. Their orders will then eventually close and they will take a nice profit.
Day traders on the other hand, sit at their trading platform for many hours each day, placing many orders and sometimes they just hope for the best. This is not a great business model. Of course there are professional Forex traders about that do day trade, in fact there are many, but in order to day trade successfully you need to be highly experienced and even if you are, these types of strategies are still arguably not ideal.
With long-term trading strategies, you don’t have to sit at your trading platform all day. It does take some work initially to find potentially profitable long-term opportunities in the currency market, but once you do find some, you can place your order suitably and just sit back, relax and watch your profits rise. Obviously you could still lose out, but long-term trades tend to be safer bets, since currency pairs typically trend strongly in one particular direction. If you are willing to be more patient, long-term trading strategies can be very effective.
Day trading, especially for beginners, is very similar to gambling. If you are just starting out or simply want to make safer profits, you should look into more long-term trading strategies. There are medium-term trading strategies too that you may or may not want to look into, such as swing trading and gap trading. Whatever strategy you choose to use though, just ensure that it is appropriate for you and that you understand it. Some beginners start out with day trading because they are excited and want to trade as much as they can, but you need to think about whether or not you day trading really is for you. When choosing a Forex trading strategy, be sure to adapt it too and regardless of what strategy you decide to go with, ensure that you open a demo account with a broker of your choice first so that you can test its effectiveness.
Binary options may also interest you as someone looking to make money in the Forex market. What are binary options? For the sake of simplicity, they basically give Forex traders the chance to make real profits while being able to control their risk perhaps more effectively than they can with leverage. When you make a winning trade with binary options in Forex trading, you cash in a set amount, which would have been defined before you placed the trade. If you lose, you lose no more than what you initially put up.
In conclusion, Forex day trading strategies are not particularly ideal in general, but they are definitely not ideal for beginners who are just starting out. Day trading is similar to gambling, because it involves placing many orders each day and relying purely on short-term price volatility, which isn’t a great business model. Longer-term trading strategies are more likely to bring Forex traders profits than shorter-term ones; they are generally safer and simpler. They are also generally easier to understand and adapt. Long-term trading strategies can also be highly profitable. Again, it is important to note that day trading strategies can work, but you shouldn’t really go with day trading unless you are highly experienced.