Trading on a daily basis

Day trading is a common trading method in which you buy and sell a financial instrument over the course of one trading day in order to profit from modest price swings.

Day trading is a type of short-term trading where, unlike scalping, you only take one deal each day and close it out when the day is done.

These traders enjoy picking a side at the start of the day, acting on their bias, and then either profiting or losing at the end of the day.

They despise having to hold their trades overnight.

Day traders are forex traders that have adequate time during the day to evaluate, execute, and monitor trades.

If you think scalping is too rapid for you yet swing trading is too slow, day trading might be for you.

You may be a forex day trader if:

• You enjoy starting and ending trades within one day.

• You have time to evaluate the markets in the morning and can keep track of them throughout the day.

• At the end of the day, you want to know if you won or lost.

You may not be a forex day trader if:

• You prefer longer or shorter term trading,

• You don't have time to analyze markets and keep track of them all day.

• You work during the day.

If you decide to day trade, here are some things to think about:

Keep up with the newest fundamentals news to help you make a decision.

You'll want to keep up with the newest economic news so you can make trading decisions early in the day.

Do you have time to keep an eye on your business？

Consider how you'll divide your time between work and trading if you have a full-time job. Basically, don't get fired because you're constantly staring at your charts!

The Different Types of Day Trading

One or more of the following day trading methods are frequently used by day traders trying to maximize intraday gains.

Trading Trends

When you look at a larger time frame chart and discern an overall trend, this is known as trend trading.

After you've established the main trend, you may shift to a smaller time frame chart and seek for trade chances in that direction.

Using indications on a shorter time frame chart will help you determine when to enter trades. Pip Surfer's world-famous Cowabunga System is an example of this type of trading.

First, look at a broader time range to see what the overall pattern is.

Indicators can be used to help you confirm the trend.

You can then proceed to a smaller timeframe and hunt for entry in the same direction once you've established the broad trend.

Do you recall this？ It's referred to as “Multiple Time Frame Analysis.”

Trading Against the Trend

Countertrend day trading is similar to trend trading, however you hunt for transactions in the other direction once you've established your overall trend.

The goal is to identify the end of a trend and enter the market before it reverses. This is a little riskier, but it can pay off handsomely.

On the 4hr chart, we can observe that there was a long and weary downtrend. This indicates that the market may be on the verge of reversing.

We would hunt for trades in the opposite direction of the overall trend on a smaller time frame, such as a 15-minute chart, because our thinking is “counter trend.”

Traders who employ this method must be fast to recognize the end of a trend in order to enter a position at the best possible price.

This method goes against the grain and might backfire on traders at times.

Remember that going against the trend is extremely dangerous, but if done right, it may pay out handsomely!

Countertrend trading benefits people who are well-versed in recent market activity and so know when to bet against it.

Trading on the Range

Range trading, also known as channel trading, is a day trading strategy that begins with a thorough study of recent market action.

During the day, a trader will examine chart patterns for regular highs and lows, keeping a close eye on the difference between these points.

A trader might decide to purchase or sell depending on their judgment of the market's direction, for example, if the price has been rising off a support level or falling off a resistance level.

This is referred to as “trading in a range,” in which the price rises and then falls back to the low. And the other way around.

A day trader who wants to go long will buy around the low price and sell around the high price if they use this method.

A day trader who wants to go short will sell around the high price and buy at the low price if they use this approach.

To maintain their trading in line with what they feel is happening in the market, most range traders will use stop losses and limit orders.

A stop loss order occurs when the price of a security falls below the trader's entry point, and the position is automatically closed out.

A limit order closes a position automatically when the trader believes a profitable run is about to expire.

Range trading necessitates enough volatility to keep the price moving throughout the day, but not so much that it breaks out of the range and begins a new trend.

But if the price does break out, there's a plan in place.

Breakout Investing

Breakout trading is defined as looking at a pair's range during specific hours of the day and then placing trades on either side in the hopes of catching a breakout in either direction.

This is especially useful when a pair has been trading in a narrow range because it usually indicates that the pair is poised to make a significant move.

Your goal is to position yourself so that when the motion happens, you'll be ready to ride the wave!

In breakout trading, you identify a range where strong support and resistance have held.

You can then establish entry points above and below your breakout levels once you've done that.

As a general guideline, you should aim for the same number of pips as your established range.

Check out our “Trading Breakouts” lesson to ensure you have this down pat!

Trading in the news

Day traders employ news trading as one of their most conventional, primarily short-term focused trading tactics.

When it comes to news trading, charts and technical analysis are less important.

They are waiting for information that they feel will cause prices to move in one direction or the other.

This data could come from a study providing economic data like unemployment, interest rates, or inflation, or it could just come from breaking news or random presidential tweets.

To be successful in news trading, day traders must have a thorough awareness of the markets they are trading.

They generate the insights necessary to predict how the news will be perceived by the market in question, as well as how its price will be altered.

They will be aware of multiple news sources at the same time and will know when to enter the market.

The disadvantage of news trading is that significant price changes are usually uncommon.

Expectations of such events are frequently reflected into the price in the run-up to the announcement.