Why?
The Forex day trader takes advantage of the small price movements within the day or session. The trader opens positions during the day or the session and closes these before the end of that day. The trader takes advantage of the market movements during the day session.
Therefore, these traders prefer liquid markets such as the currency-, stocks- or index markets.A prerequisite for success in intraday trading (or any other type of trading) is having sufficient market knowledge.
Some of those new to trading ask themselves, 'is Forex good for day trading?'. As you now know, because of its liquidity, many new traders start day trading in Forex. If you are interested in learning how to day trade in Forex, you can apply all the information you learn in this Forex day trading article to any market, including Forex.
How to Trade Forex Intraday?
The first step to getting started with Forex day trading is to gain access to the right Forex day trading tools. Many Traders ask, what platform is best for Forex day trading? What is the best Forex day trading software? Whether you are looking for the best Forex day trading platform in the UK or anywhere else in the world, MetaTrader 5 has you covered.
MetaTrader 5 is an elite trading platform that offers professional traders a range of exclusive benefits such as advanced charting capabilities, automated trading and the ability to fully customise and change this Forex day trading platform to suit your individual trading preferences.
Whilst intraday trading might be profitable it is not easy. Intraday trading, as any form of trading or investing, carries risks and should not be assumed without prior training and a vast understanding of the markets.
Experienced traders can attest to the fact that a trading plan which includes detailed risk management rules, is essential. Based on this plan, the trader scans the markets for trading opportunities, the best entry and exit points and assesses possible trading opportunities for a healthy risk/reward ratio.
Understanding the Dynamics of the Stock Markets in Intraday Trading
A thorough understanding of the market's dynamics and the main factors driving market movements is essential.
Intraday traders monitor technical and fundamental indicators to gain insight into the market sentiment and possible future price development. Solid insight into what moves the markets enables the trader to identify the most favourable opportunities and make informed trading decisions.
A Disciplined Approach for Intraday Trading
In all aspects of life, discipline, among other factors, is important.
Discipline: Trading without a systematic and disciplined approach is essentially gambling. Therefore long term success in trading without discipline is next to impossible.Monitoring: A trader must be able to monitor prices during certain periods without acting on emotions and making reckless decisions.
Strategy: follow a set trading strategy that clearly specifies the conditions for entering the market. The trader would scan the market based on the parameters set out in his strategy and would only act when a set up meets his rules.
When the markets move vigorously traders can be tempted to place trades to 'get in on the action' or be reluctant to enter into a position after a few losses. Acting in accordance with one's trading plan can be challenging and requires discipline.
Sometimes the market follows the course you expected, but just because you were able to predict a certain movement does not mean you should use your gut feeling as an indicator to place trades. Even though it can be painful to miss an opportunity you had anticipated, making random trading decisions will ultimately result in losses.
