Day trading in Forex refers to the practice of performing trades within a day. It means that the deals can be open and closed in a day. When a day trading deal extends one day the trading move is automatically renewed at 22.00 GMT every night as long as the deal closes. You can perform as many trades as you want in a particular day. Once you decide to perform day trading in Forex, you have to determine which deal you want to select. After choosing the deal you have to monitor your account regarding the progress of the deal and then close it.
If the deal is rolled on to the next day then you will have to pay an extra fee for renewing the deal for an extra 24 hours. The payment will be collected as soon as the deal is renewed. This fee will be collected from your Free Balance and in case you do not have the required free balance then the money will be debited from your credit card. Given below are a few more details about day trading in Forex.
The steps involved in Day Trading
The determination of your selected deal will be based on your predictions of the market. If you believe that the Chinese Yen will increase in value (after studying the market) you might as well buy the Chinese Yen before its rise and then sell it off after its value rises in future. In this fashion you will end up raking in profits. On the other hand, if the value of the Chinese Yen decreases then you will end up suffering losses. Needless to mention, forex trading in general is all about making accurate predictions. You might choose to pair the Chinese Yen against the American dollar USD. Once the value of Yen increases against dollar to the level of your expectancy you can close the deal. After selecting the currency pair you need to determine the amount of money you need to trade with the Stop-Loss rate. The stop loss feature enables automatic closing of the deal if it goes against your expectations. It is the stop loss rate chosen by you which will go on to determine the “rate” at which you lose money. The rate can be changed any time.
After selecting all these features you go on to monitor the trade and close the deal. If you have selected a stop loss rate and the deal has already reached that level to which you are ready to accept the losses, the deal will automatically be closed.
Two ways in which Day Trading can be practiced
The entire phenomenon of forex day trading is influenced by two dominant ways of trading:
- Day Trading with the help of Fundamental Analysis
- Day Trading with the help of Technical Analysis
The Fundamental method of Analysis entails the trader implementing his trading strategies after consulting economic data. The investor can study the economic data of one country and compare the same with that of the other and place his bets after finding out which economy is strengthening. The banks and other big financial institutions often utilize the economic calendar to secure the economic reports of several countries. If you are selecting the fundamental technique of day trading then you should ensure that you are selecting accurate economic reports. It doesn’t matter whether you’re sitting in one of the houses for rent in Coimbatore or in London– securing dependable market reports will bolster chances of you succeeding here.
Forex Trading with Technical Analysis–this particular analytical method entails the dependence on the traditional setups. It involves the use of market indicators, charts or graphs to predict the rise and fall of currencies and placing bets in accordance.