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Features and Key Strategies of Day Trading

Saturday, 29 July 2017 04:44
Features and Key Strategies of Day Trading

There are short-term and long-term transactions on the Forex market. Short-term transactions take place within a single day, so this type of trade is called day trading. The time from opening a position to closing it may vary from a few minutes to several hours, and day traders pay the particular attention to the high-liquidity assets. The more trades a trader makes, the greater profit he will get. However, to get a profit, it's worth knowing the characteristics of the day trading, as well as choosing the right strategy.

Principles of the Day Trading

Day trading doesn’t require the large amounts of deposit and uses even the most insignificant price fluctuations. For such a reason, beginners often choose this method, getting the opportunity to make the transactions quickly, operating the small amounts.

  • The basis of the successful trading is a quick reaction to the price fluctuations and rapid analysis. Therefore, the beginners need to study the technical analysis of the Forex market first.
  • During the day, the trader can analyze the events of two sessions - the American and the European ones. Therefore, the price chart with the D1 time frame may have two positions of the highest profit.
  • The price of a currency pair varies within 80 points per day, so the average daily profit is 40 points. Experienced traders earn more sometimes, but don’t forget that the price always rolls back after the trend. Therefore, part of the profit should be withdrawn from the account.

Within the day trading, you need to monitor the news all the time. At the same time, deep analysis isn’t as important as the moment of the news release, since they always cause noticeable price fluctuations. In the days of the Central Bank news publications, it’s better to stop trading and close the positions opened, or make them safe from losses.

We recommend using two stop losses, the main one, and the additional one. An extra stop order is set at the level of the so-called "assumed risk" - this is the maximum amount you can lose in the case of the unforeseen circumstances. You can use such an order for a sharp reversal of the trend.

Try to follow the graph on several time frames, to observe the correction of the price levels most correctly.

Common Strategies of the Day Trading

A lot of strategies have been developed since the high popularity of the intraday trading. There are four most efficient among them.



The scalping method involves a large number of transactions, with a small profit. The trader's goal is to get several points of profit from each transaction. The success of the strategy depends on the frequency of the positions opening, and their number. Scalping is suitable for currency pairs with high volatility level, using small spread values.

This strategy involves trading on the shortest time frames. The positions close at the level of the minimal profit. Using the pips method, traders choose the leverage size within 1: 200. At the same time, a successful trading process is ensured by making over 100 transactions per day.

Trading with the News

The important economic news is always significantly displayed on the market. Traders, who prefer such a method, monitor the news output all the time, checking with the economic calendar. Particular attention is paid to the fundamental analysis of the market, and the forecasts. Obviously, this strategy requires the appropriate trading experience, as well as knowledge of economics.

Trading on Rollbacks

The essence of this approach is to open the positions during the weak market activity. All the orders are open against the trend. For example, if there is a growing trend on the market, the trader waits for a correction, and then opens a buy order. If there is a downtrend, you should wait for a price rollback, and only then open a sale deal.


According to statistics, intraday trading is the most popular among the participants of the Forex market. With the day trading, beginners can easily learn the principles of trading, risking small amounts. Experienced participants can sharpen their skills, and apply the fundamental knowledge.

Choose a strategy that fits you most, make the deals and a stable profit won’t be long in coming.

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Carol Wilkinson
Carol Wilkinson

Trading Consultant, 48 years old. I make financional market overwies, develop trading strategy. My target audience - private investors and small business companies