Forex Day Trading

Forex Day Trading
Over the years there has been a lot of talk about day trading, swing trading, and position trading.

What is the difference?

Day trading is putting on a trade and only being in it for a few minutes to a few hours but all of your trades will be closed at the end of your trading day.

Swing trading is being in a trade from a few hours to a few days maybe even a week or two.

Position trading is putting on a trade and being in the trade for months to years.

Each of these styles requires a different set of skills. For this article we will only talk about the forex day trading.

To be a day trader you need to be in front of your computer to manage the trades. A day trader will make many trades in a day of trading but they do not have to think about the market overnight. They only have to think about the market and their trades the next day when they open some new trades.

The day trader usually likes a lot of action; they make decisions quickly and have to get in and out quickly. They usually have several losses and several profits each day. The goal is to have more profits than losses. It is possible for the day trader to have more losing trades than winning trades and still make money because they let their winning trades run and cut their losing trades off early.

Day traders need a trading strategy and a system. They also need to have a set of signals that allow them to make quick decisions. Not all indicators or time frames are good for day trading.

You would not want to look at the 1 hr time frame for day trading. Many day traders like the one and five minute charts. We find the one minute chart to be too fast for us. For our day trading strategy we like to look for the trend on the 15 minute chart then look at the 5 minute chart to enter and exit the trade. We only take trades in the direction of the trend on the 15 minute chart when we are day trading.

Day trading is not for everyone. Try it and see if it is for you. If you have the time and like the excitement then you might have found your trading niche.