Day trading is probably the most common form of Forex trading in existence. Most newbie traders are introduced into the world of trading in foreign exchange with day trading – eyeing short-term gains. Quick returns, however, come at the cost of heightened risks.
But if you’re not one for playing a long game, there are still ways to day trade with minimal risks. This brings us to one of the most underutilized approaches of day trading – the one trade a day Forex system.
For beginners and even experienced traders, one trade a day provides a great opportunity for a focussed approach to capital management.
What is one trade a day?
The one trade a day Forex trading strategy is an approach wherein the trader only makes a single trade every given day. How is this effective? Consider the example of a buffet meal.
The sheer idea of having an endless supply of food, fills people up with so much joy that they end up eating more than their stomachs can handle. The consequence is that of recurring spells at the washroom.
Similarly, with trading too, just because you can trade endlessly throughout the day, trying to scalp great returns doesn’t mean you should.
Instead, using one trade a day Forex strategy gives traders more time to study a particular day-wise trend. By having a clear trading plan before initiating a deal enables one to be more rationale and avoid making impulsive decisions.
Most novice traders in trying to making numerous trades throughout the day, end up making miscalculations and hence losses.
Note: Always remember focusing on quality trades over quantity is the quickest & surest way of making money.
How to select the right currency pair for one trade a day Forex system?
This is essentially what it all comes down to - choosing the right currency pair for a given day. First and foremost, make it a habit of going through the charts of at least seven different currency pairs. The next step is to go through the market news and getting in touch with potential risks and predictions.
It is natural that the general uptrend will see a strong currency paired against a weaker one. For instance, the EUR/GBP will move up if the Euro happens to be strengthening against the British Pound. The goal is to notice a potential uptrend early and reap its benefits by the end of the day.
Unlike with the practice of scalping, one trade a day Forex trading strategy provides sufficient time for leveraging significant sums. On the other hand, unlike long-term trades, one doesn’t have to bear the brunt of high interest rates. This makes one trade a day an opportune strategy for great returns by risking little.
The crucial aspect of the one trade a day Forex system is to stay patient and disciplined. You need to trust your everyday trades and resist the temptation to scalp.
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.