About day trading

Various strategies are available to individuals involved in online currency trading, and one of the most popular in today’s vibrant currency markets is day trading.

Forex trading is carried on worldwide; because of the different time zones, currency is being traded somewhere on the planet 24-hours a day, seven days a week. As the name suggests, employing a day trading strategy means that the trader does not hold any positions overnight.

Because forex trading is performed online, traders are not restricted by geographical location or prevented from trading into the wee hours of the morning if they wish. Many traders take advantage of this, and with automated trading and forex robots they can literally trade around the clock, even while they are sleeping. The day trader, however, does not take advantage of this. Instead, any open positions are liquidated when his or her trading day is over.

The day trader works on the principle that the longer they leave a trade position open, the greater the chance of it becoming a losing one. The trader will typically open multiple trades during the day, which means that he or she can take advantage of relatively small currency fluctuations and still be able to make a profit – providing the right trades are executed.

Because the fluctuations during a particular day are often very small, the day trader will usually need to invest more capital compared with those employing other trading strategies during the course of their trading day to make more profit. This increases the day trader’s risk, but also serves to increase the profits from successful trades.

The use of leverage makes it possible to engage in forex day trading without an enormous initial capital outlay; however, it must be remembered that any losses incurred using leverage will need to be paid back. It is important that anyone engaging in currency day trading have the capital to hand to cover any shortfalls, and not take any unnecessary risks.

Despite the need for a higher amount of capital when engaging in online forex day trading, this strategy has proven to be popular with both novice and experienced traders alike.

Leave a Comment