Forex Day Trading Strategies

KEY TAKEAWAYS

• Keep emotions at bay
• Day trading requires constant attention and stress resistance
• To succeed in day trading traders strategy should be based on deep technical analysis using charts, indicators and models to predict future price movements.

What is Day Trading Strategy

Day trading is a short term trading strategy, involves buying and selling of financial instruments within a day, to profit from small movements of price. Before you continue reading about day trading, you can improve your forex trading skills by reading our other article on "What is Forex". Day traders need to be continuously focused, since markets, such as the oil market can move suddenly in the short term. Hence these strategies are particularly effective in volatile markets.

Here are some Day trading popular techniques:

• Collection of information, because knowledge is the power, without it no trade will pull through.
• Setting aside funds, deciding how much money a trader is ready to risk. Basically setting aside money that trader is “ready to lose”.
• Having enough time, Day trading is a job- not a hobby, so it's important to devote a big chunk of the day to track markets and seize opportunities.
• Go big or go home, is not the case here - generally it’s better to start day trading with small amounts.
• Avoid illiquid stocks - they have low prices, but big break might never come. The idea of liquidity is important to have in mind when curving a trading strategy for all kinds of asset markets. Traders look for liquidity indicators in a market to enter the trade at the desired position or to suffer price volatility due to slippage. Liquidity goes alongside market capitalization and volatility in your crypto day trading strategies. In this case, liquidity not only refers to how easy it is to buy or sell a given crypto asset but also if a cryptocurrency convertible into cash or other tradable assets.
• Time of trade - Many experienced day traders begin to execute as soon as the markets open in the morning, that's when news usually breaks, which could contribute to price volatility.
• Set Stop loss - is the price at which a trader will sell a stock and take a loss on the trade (this happens when trade doesn’t go the way it was planned, in a way it’s a cutting losses approach)
• Set Take-profit point is the price at which a trader will sell a stock and take a profit on the trade.
• No emotions welcomed - when trading, generally, surrendering to greed, fear, eforia and hope is a big no-no. Clear head and pure analysis will suffice.
• Have a plan and stick to it. With fast changing situations on the market, trader can’t think on the go, so it's important to make a plan beforehand.

Best Day Trading Strategies

Day trading strategies are essential if a trader wants to benefit from frequent and small price fluctuations. An effective strategy should be based on deep technical analysis using charts, indicators and models to predict future price movements.

Below we will introduce you to the most common day trading strategies that work.