Online Currency Trade

Day Trading

The Foreign Exchange Market is a true 24 hour market. This is one characteristic of Forex that provides ample opportunities for a trader. One option for a trader is in day trading. Day trading capitalizes on the various price swings that occur during the day. A day trader focuses on what happens in the market at the moment.

Perhaps the most important job of a trader is to control risk. However, a day trader views this from a slightly different perspective. As a day trader looks at the price swings that occur during the day only, profit is smaller as compared to a swing trader. When trading during the day, it is difficult to stop at your predetermined cut loss hurdle with the hope that things will look better later on in the day.

This leads to one characteristic that is crucial for traders in general, and that is discipline. You may have a well thought out plan or strategy. You may have rules as to when to buy, when to sell, or when to hold. Discipline is simply respecting and following your plan. Human nature makes it easy to deviate. How many times do we say, "Just a little bit more"? Discipline is especially difficult for day traders. As the time frame is shorter, you do not have the time to think, cool down and control yourself. But if you do not have the discipline to adhere to your own plan, you might just as well throw it out the window, or simply not make a plan at all.

It does not matter where you trade, but what is important to be successful, or to minimize risks, is an understanding of what you are getting into. Every market has its own persona, and it would be good for a trader to know its characteristics. A day trader does not care what happens tomorrow or the week after. The concern is during the day. Therefore, the market that you choose should have enough fluctuation or volatility to allow this. Select a market that is normally volatile, and not just one that temporarily swings.

It is not just the market that has personality - so does currency. Some currency paira are more active during certain times of the day, and quiet during other times. A day trader would take advantage of the price swings of these currencies rather than trade currencies which shows no, or limited, action.