Def: The process of trading any Forex market on a daily basis is either being currencies, indices, options, agricultural or energy commodities. All open positions are not held more than 24 hours, should they not be closed during this stated time then it is no longer a day trading and you may be liable be charged other rolling fees depending on the Forex broker that you use.
Who is a day trader?
A day trader is someone who trades on a daily basis to make profit, he opens trading position and closes them within 24 hours as stated. Day traders are always looking to make money very quick and they are always online watching the market movements in order to take advantages, they usually study the market on a daily basis to prepare themselves for the next days.
Day trading and spreads
Most day traders end up paying more money on spreads; remember that every time you open a trade position online you will be charged a spread by your Forex broker (A spread is the difference between a buying price and a selling price). The Forex market is so speculative and all this opening of trades will be done online on a daily basis, you will have an online account. Every time you open a trade position you will be charged and if you open trades ten times in a day then you will be charged the spread ten times. Most day traders prefer diversifying their trading position than relying on a single trade.
What are the trading strategies which day traders use?
Most day traders have their own winning strategy of trading; a winning strategy is any trading way that is profitable, the reason for every Forex trader to be in the market is to make profit just like the reason of any business man to start his business is to make profit, their goals are common which is generating more money as possible. There are lots of strategies to generate that money in Forex but the most profitable and common one are:
- Intra-day strategy
- Short term strategy
- Exit strategy
- Entry strategy
- Rebound strategy
When to open trades as a day trader?
Day traders wake up very early in morning and sleep a bit late when the market start to be less volatile; in simple saying, day traders are the most market opportunist. Day traders usually set stop loss and take profits to avoid unknown market movements and they work on targets, usually when they get what they were aiming for the day they then stop trading waiting for another day to come. Day traders make the fastest segment in the growing global market.
Can you make profit with day trading?
Yes you can make quick money with day trading only if your timings are very good, with a simple movements you can benefit greatly if the market goes on your favor but also you can lose a lot of money should the market goes against you. With the help of leverage you can make more money but you should always bear in mind that those options and CFDs when traded over the counter are leveraged products and they carry substantial risk up to your invested capital, so day trading with discipline and caution is encouraged, you should never use any monies that you are not prepared to lose. Most of day traders set their profit margin to a very small pips movements per day and they always uses leverages to get their profit at the huge quantities, they are not settling for less, they always open their trades when there market is volatile, they usually uses the economic calendar to time the market movements.
Which markets can I trade on a daily basis?
There are so many markets you can trade from, here are few;
- Spot orders
- Other currencies
Day trading plays a significant role in the Forex market, the Forex market is so huge and the largest in the financial market, over 5 trillion dollars are traded every day. Day trading is also most profitable like other trading opportunities that are out there. Day trading is always challenging like any other money making method, you will sometimes lose but the most important part is that you should always balance your trading’s so that at the end of the day you make profit and your online account keeps accumulating.