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Forex Day Trading Strategies

Forex Day Trading Strategies

25.03.2021

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The essence and features of trading strategies on the daily timeframe

The daily timeframe is one of the slowest in Forex. Even more global weekly and monthly are used in trade quite rarely and, mainly, as auxiliary ones. Trades that open on D1 can remain open from several days to several months. Considering that there are not very many truly liquid assets on Forex (7 par-majors, a couple of cross-rates, and several), a trader opens deals no more than 1-2 times a week.

On the one hand, such trading, on average, brings less profit than intraday trading or scalping. On the other hand, when trading on D1, a trader does not need to constantly monitor the chart – it is enough to evaluate the changes that have occurred twice a day, in the morning and in the evening. If the strategy implies a strict set of stop losses and takes profit, you can limit yourself to just one session per day, which will take no more than 10 minutes.

Trading on daily charts is as close as possible to medium-term investing. Even when trading by technical analysis, a trader should consider global fundamental factors. If with Inge’s scalp, you can simply suspend trading at the time of an important news release, then a deal opened for several weeks will certainly be influenced by the results of important economic events.

Because of this, medium-term traders rarely use automated trading systems, preferring to make deals on their own and, if necessary, make changes to them. In short-term trading and Inge’s scalp, when events develop quickly, it is most effective to strictly follow the TS rules and not try to make decisions on the fly. In trading on the daily time frame, while the deal is still open, an event may occur that radically changes the situation and makes following the old rules impractical. On the other hand, the trader has enough time to calmly assess the situation and make a new decision, therefore, day strategies give a lot of freedom of choice and improvisation.

Forex strategies for daily charts

Trading on daily charts is notable for its conservatism. Here you have more than enough time to make a decision to open a trade. Plus, you don’t have to sit in front of the monitor all day. On daily charts, as a rule, there are 2-3 trends per year. They are formed under the influence of the economic situation in the world. Tracking the economic situation, changes in the monetary policy of states is one of the most important success factors on daily charts. Speeches by heads of state, heads of central banks, data on GDP, inflation, unemployment are all moments to open deals. You should also pay attention to all kinds of force majeure: natural disasters, terrorist attacks, economic crises. Working long-term on news is one of the most stable forex strategies. The economic situation does not change day by day, thanks to which we get stable trends. Technical indicators are used more often to filter trades. There should be few indicators, each of them should perform a specific task. An indicator for determining a trend, an indicator for confirming an entry point, etc. There is only one difficulty when trading on daily charts – the need to hold an open position for a long time. Not everyone will be able to hold open trades for several weeks or even months. At the same time, Forex strategies on daily charts provide the best opportunities for novice Forex traders. Such strategies are less demanding on the quality of analysis. Big profits make up for losses easily. An indicator for determining a trend, an indicator for confirming an entry point, etc. There is only one difficulty when trading on daily charts – the need to hold an open position for a long time. Not everyone will be able to hold open trades for several weeks or even months. At the same time, Forex strategies on daily charts provide the best opportunities for novice Forex traders. Such strategies are less demanding on the quality of analysis. Big profits make up for losses easily. An indicator for determining a trend, an indicator for confirming an entry point, etc. There is only one difficulty when trading on daily charts – the need to hold an open position for a long time. Not everyone will be able to hold open trades for several weeks or even months. At the same time, Forex strategies on daily charts provide the best opportunities for novice Forex traders. Such strategies are less demanding on the quality of analysis. Big profits make up for losses easily. Forex strategies on daily charts provide the best opportunities for beginner Forex traders. Such strategies are less demanding on the quality of analysis. Big profits make up for losses easily. Forex strategies on daily charts provide the best opportunities for beginner Forex traders. Such strategies are less demanding on the quality of analysis. Big profits make up for losses easily.

Day trading strategies

For a long time, intraday trading has been one of the most popular types of trading. The trading signals generated by your daily forex strategy are a key element of your trading success. However, not all-day trading techniques and systems are the same.

You have probably thought about which period to trade – in the long-term or in the short-term. Indeed, this is an extremely important decision that depends on both your trading strategy and your psychological qualities.

At first glance, it might seem that long-term trading is easier and involves less stress in making trading decisions. However, if you look closely, it turns out that none of these types of trading can be said to involve more or less stress than the other.

The main challenge in your decision is figuring out which trading style is best for your character, and this must be done before your first trade. Today we will look at various trading techniques and talk about the types of forex day trading.

What is day trading?

Forex day trading means trading in which a position is held for no longer than one day. Please note that intraday signals and daily trading positions are not considered scalping. Scalping involves holding a position for a few minutes or less.

An important advantage of day trading is that your capital is only at risk for short periods of time. Thus, if you make a wrong trading decision, you will understand it in a few hours or on the same day. This will give you the opportunity to free up your funds to implement new trading ideas. Trading on a short-term time horizon requires less investment than long-term trading, for which you will have to allocate significant capital.

When trading in the short term, you can easily determine the expected risk/reward ratio for a trade. This is because in short-term intraday or intra-week swing trading (swing trading), take profit and risk level are clearly defined. This clarity helps you plan where you will enter and exit the market, especially if you are using stop losses and take profits.

Another advantage of short-term trading is the ability to identify market orders. This will help you open intraday positions so that you can manage potential market entry signals on a daily basis.

Finding the best daily forex trading system is often compared to finding the Holy Grail. Keep in mind that a good forex trading system must be combined with proper money management. These two aspects cannot be separated. There are a huge number of day trading systems and we have selected one that is potentially one of the best day Forex trading systems.

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