You may have heard about forex day trading, which got you thinking, what is forex day trading? Well we are here to answer to that question.
Forex day trading involves buying or selling currency pairs by the view of making short – but regular profits. In most cases, you will never keep hold of an open position for longer than a day or session. As such, you will need to be an expert in both technical and fundamental analysis to succeed in this section of the forex trading scene.
How do you know if you are a day trader?
You might be a day trader if,
- You like to close a position the same day on which you opened it.
- You have enough free time to analyze the markets at the beginning of the day and monitor them throughout the day.
- You like to know whether or not you make a profit or loss money at the end of the day.
How to Day Trade Forex – Smart Guide
Follow the quickfire steps outlined below if you’re interested in starting your forex day trading journey right now.
- Step 1: Choose your strategy – To become a successful day trader in forex, you will need to deploy a suitable plan for your skillset. A safe starting point is to concentrate on primary currency pairs like EURUSD, GBPUSD, etc. – which offer the lowest spreads and minimum levels of volatility.
- Step 2: Sign up for a Forex Broker – You will need to have a regulated forex broker on your side to start with day trading. There are a few dozen good forex brokers in the market.
- Step 3: Start with a demo account – If you’re just starting with forex – it is always better to start with a demo account. Most brokers offer demo funds – with the demo platform reflecting real forex market conditions.
- Step 4: Trade live forex pairs – Once you are satisfied with how forex day trading operates – you can begin trading currency pairs in the live markets.
Unrealistic Expectations in Forex Trading
Much can be said of silly expectations, which may come from many sources, but often result in the above problems. Our trading expectations are often imposed on the market, yet we cannot expect it to act according to our desires. The market doesn’t care about individual wishes, and traders must accept that the market can be rough, volatile, and trending all in short-, medium- and long-term periods. There is no tried-and-true formula for separating each move and profiting, and assuming so will result in disappointment and flaws in the decision.