Forex Forums | ForexLasers.com


Go Back   Forex Lasers Forum > FOREX TRAINING > Forex Articles


What is Day Trading and Who Should be Doing it

Forex Articles


Reply
 
LinkBack Thread Tools Search this Thread
  #1  
Old 20-10-2017, 13:40
Moderator
 
Join Date: Mar 2014
Posts: 979
Default What is Day Trading and Who Should be Doing it

Day trading involves the buying and selling of financial instruments within the same trading day. When you trade forex based on a day trading strategy, this means that you are likely to close your position at the end of the trading day. As such, day traders cannot be considered as investors, but as speculators. To contrast, swing traders tend to keep positions open for days, weeks or even months at a time, and as such can be described as investors.

Day traders play an important role in the foreign exchange market as they fill the market with plenty of liquidity. In order to effectively day trade it is essential that you have:

Adequate capital
To benefit from day trading you will need a large amount of initial capital to get started. You should feel comfortable with losing this money, on both an emotional and financial level. Typically, day traders only use risk capital, which is money they have specifically allocated for forex trading. This money is not needed to support one’s family, pay off bills or purchase important necessities.

In-depth market knowledge and experience
There is simply no way to successfully day trade without a detailed knowledge of the foreign exchange market. This means that not only should you follow daily forex news, but you should also perform technical analysis so that you are aware of the latest market conditions.

A tried and tested forex trading strategy
A day trader needs to create a refined forex trading strategy that they have tested meticulously on a demo trading account. This trading strategy should give the trader a ‘trading edge’ which will help them to generate notable returns on investment day after day.

The Personality of a Day Trader
Day trading is certainly not for everybody, as there is a great deal of risk involved in entering and exiting the market many times within a given day. To be a successful day trader you need to possess endless patience and an ability to excel under pressure. You need to be able to make rapid forex trading decisions with fortitude and resilience, whilst successfully executing a large number of trades that generate small profits.

Is Day Trading for you?
While day trading enables speculators to make excellent returns on investment day by day, you should only perform day trading if you possess thorough market knowledge as well as plenty of FX trading experience. You also need to be highly adept on the trading platform as you navigate your way through trade after trade, coping well under pressure and not getting stressed.



Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On



All times are GMT. The time now is 08:02.


Powered by vBulletin® Version 3.8.10
Copyright ©2000 - 2024, vBulletin Solutions, Inc.