Day Trading Forex

One of the most attractive features of the Forex market is the ability to become a day trader with little or no experience. Day traders see commercials and testimonials all over the Internet about people who got rich by trading less than twenty hours a week.

The fact is, day trading is a challenging way to approach trading of any kind, but it’s even more challenging in the Forex market.

Forex is always open. But the key to being a successful trader is to take advantage of the volatility and changes that occur over the course of a 24 hour day. And if you commit yourself to only devoting three or four hours out of those 24, by definition you are lowering the likelihood of being successful. The very moment you step away from your computer could be the moment the market changes for your benefit.

Before you begin day trading you need to understand that the key to success is timing and the key to timing is being experienced enough to recognizing when the timing is right to act.

It’s best to begin Forex trading in large windows of time, such as four hours or on the daily chart. The bigger the window you use the more likely you are to be successful. This is true for any type of trading, Forex or otherwise, but it’s something that every beginner seems to ignore. For example, when you use to a five minute chart, you need to make decisions in a matter of seconds, so you’re trading for small targets. Conversely, the higher your exposure, the faster you need to be as opposed to if you were holding a trade for a shorter time period.
You need to be on top of your game and ready to act at a moment’s notice. A failure to act can cause you to lose more money than you should have or make less money than you had hoped. The more volatile the market the shorter the time you are given to decide.

When starting out in Forex it’s a good strategy to begin by trading in small, one or two currency pairs that will permit you more time for analysis. As you get more experienced, you can increase your currency pairs and reduce your time frames.