Forex day trading is the process of buying and selling of currencies in the forex market within the opening and closing of a day’s trade. This is a short term trading where all transactions are opened and closed in a day whether it ends in a loss or a profit. The reason for forex day trading is to make gains by entering and exiting the market multiple times.
A person who participates in forex day trading is known as a forex day trader. The goal of a day trader is to make little gains from as many transactions as possible rather than sitting and waiting a long while for long term transactions. Day traders believe in the little drops of water make an ocean philosophy by striving to make small gains as many times as possible without waiting for the big fluctuations in the market that the long term traders capitalize on.
HOW FOREX DAY TRADING WORKS
Forex day traders make use of their day trading strategies to invest in small price transactions in highly liquidated assets or currencies, thus making little gains in successive transactions. Like was mentioned earlier, trading happens in a day where a trader opens a transaction and by the end of the day closes the deal for the day while starting a fresh deal next time without carrying over the previous day's deal into another day.
To be a forex day trader one needs knowledge and experience of the existing and existed trends, as well as enough funds to be able to trade efficiently. A day trader needs to find the best strategy that works for him which will give him an advantage over his colleagues in the same market. Lastly, to be able to succeed in day trading one needs discipline as a personal trait which will guide the decision he takes, when to make them and how to best execute them.
MAKING MONEY AS A DAY TRADE
Making money via day trading in forex is easy once you understand how the forex market works especially the fact that it is not steady. Again understanding all the strategies involved in day trading can help too in adapting one that best works for you. Having the focus, self control, dedication and confidence that comes with successful day trading is an added advantage. Since day trading requires accurate planning and calculation, it may not be wise for one to trade everyday simply because it's called “day” trading. Open deals and transact only on days when there is foreseeable chance of winning and successful closure of a deal because the success of a day trader is not measured on how many deals he has been in but how many deals he can close successfully.
In conclusion, anyone can be a day trader but not everyone can earn as a day trader. To earn you have to distinct yourself, accept responsibility for mistakes you make leading to your loss, learn from them and make better plans to succeed. Day trading is serious business which requires critical thinking and analysis and as such should be treated that way.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.