Forex Day Trading Strategies – Top Tips for SuccessLast Updated: May 1, 2019
Mistakes are easy to make in Forex day trading. There is no room for impulsive or arbitrary behaviour. Successful traders operate to well planned Forex day trading strategies. Here are four top tips for the Forex day trader.
Forex trading is seen by many as a get-rich-quick scheme. In fact, many brokers benefit from customers’ naivety by selling it as just that. A lot of new traders, with much potential, end up quitting early on after losing their money. Those who stick it out know that patient adherence to carefully planned Forex day trading strategies, is key.
Which is why day trading is a controversial topic amongst expert Forex traders. Forex day trading involves opening and closing trade after trade on the same day. The profit margins become smaller, and day traders have to take bigger risks than most.
4 Tips for Successful Forex Day Trading Strategies
On the other hand, for traders who already have a level of success, day trading can be an exciting way to make some quick profits. The following Forex day trading strategies are crucial for a successful intraday trader.
1. Ensure your Forex Day Trading Strategies are Well-Planned
What cannot be stressed enough is that mistakes are easy to make when you are opening and closing trades so often. Since you’ll be taking bigger risks, small mistakes can be costly. Therefore, it’s so important that nothing you do is impulsive or arbitrary.
Success comes only as a result of well planned out Forex day trading strategies that account for every step you take. You need to commit to a strategy, and be disciplined enough to avoid impulsive errors, even when things are going downhill.
Some of the most popular Forex day trading strategies include scalping and momentum trading. But stay away from reverse trading, which is considered by experts to be the worst trading strategy in the world.
2. Don’t average down
Averaging down refers to keeping a losing trade open for too long. Yes, it’s tempting to try get your money back on that trade. But it’s more important to cut your losses when necessary. This, of course, must be included in your trading plan. There should be checks and measures in place to make sure your plan A, B, and C decisions are sound.
3. Use stop-loss orders
Stop-loss orders automatically close a trade that has lost a certain amount. By putting stop-loss orders in place, you’re ensuring that, even if you don’t get to it in time, you won’t lose more than you can afford (or that your strategy can afford). These are called physical stop-loss orders.
Mental stop-loss orders are those you place when you get the “feeling” that things aren’t going your way. There are some very intuitive traders whose feelings are always right. But in general, unless you have very good evidence to back you up, stay away from making uncalculated judgements. They’re almost always emotional.
4. Do not trade around the major news releases
A general rule is to not trade when a major news release is expected. The results could be truly disastrous. However, if this is part of a sound strategy, you can do so. Just be sure to retain some scepticism.
Conclusion – Be Disciplined
Forex day trading is not for everyone. In fact, it’s only for the minority of traders who truly believe they can cut it. If that’s you (and you’re not a beginner), take heed of the above tips. Most of all — and the factor that underpins all successful Forex day trading strategies — be disciplined.