Day trading strategy Day traders take advantage of price fluctuations in-between the market open and close hours. Day traders often hold multiple positions open in a day, but do not leave positions open overnight in order to minimise the risk of overnight market volatility.
Table of contents
- 50-Pips a Day Forex Strategy
- The Truth About the Perfect Trading Strategy - Does it Exist?
- The Truth About the Perfect Trading Strategy – Does it Exist?
Strive for excellence and make every trade count! Every trade that you take outside of your trading system is an insult to yourself, to the time and effort you put into trading, and to your self-respect. Excellence really comes down to respecting yourself in the end. Once you come to respect yourself and trust your abilities and your system, it will become easier and easier for you to follow your system. If you encounter a losing streak, research whether you executed all the trades flawlessly and if yes, did the market conditions change, or did anything else happen?
During losing streaks, it is essential to stay on course and follow your system, but at the same time understand why you are losing. If there is nothing to be done, good. This describes the process-oriented mindset every professional trader MUST absolutely live by. Take the losing streak with pride, protect your capital, execute every trade with excellence and you will weather the storm. And trust me, the more emphasis you put on thoroughly following your system, the faster you will develop it into a winning system that fits your lifestyle and personality, which is incredibly important.
However, if suddenly you are winning over a sample of 50 trades — wow. This could be it! You may have a winning system. Why change it now? You are making money. Trade the system until you can do it blindly, day in, day out and execute with excellence. If your trading journal tells you that there is a LOT of potential in a certain area — go for it. Test the adjusted system on demo first, of course. Again, do not curve fit.
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The hallmark of excellent trading is monotony. You have mastered your setup, congratulations. You can now, in order to smooth your equity curve and diversify your income streams, develop another setup following the same process. Over time you may learn setups to find trades in every market condition and your equity curve will look almost perfect, although there will still be a lot of losers among your winners, obviously. It all depends on your strike rate, average risk:reward ratio, and risk appetite!
50-Pips a Day Forex Strategy
What definitely holds true in the world of bits and bytes also holds true in the world of trading. Once you make it, be happy with it. This is largely achieved thanks to proven Forex trading strategies. Using these strategies, a trader develops for himself a set of rules that help to take advantage of Forex trading.
The truth is, you can spend hours searching all over the internet for the right strategy — and have no luck finding one. Before discussing trading setups and possible strategies, we need to first understand why one would consider trading Forex in the first place. There are two main reasons: hedging and speculation. Hedging refers to companies protecting themselves from losses.
They get their daily profits from any overseas country that has paid revenue in a foreign currency. Then, they transfer it back to their own country, expecting fluctuation in the currency. On the other hand, speculation refers to predicting a move that a company might make in a certain situation. If done correctly, these predictions greatly improve trading results.
Speculation is what day trading is all about.
The Truth About the Perfect Trading Strategy - Does it Exist?
With the help of decent strategies, you can progress in the Forex trading world and ultimately develop your own trading strategy. The downside is that this is a time-consuming and difficult process. This may allow you to see a profit margin you could have missed otherwise. These are the Forex trading strategies that work, and they have been proven to work by many traders.
This is suitable for all timeframes and currency pairings. It is, at this moment, one of the trending strategies in the market. The Bladerunner Trade is a price action strategy. This trade uses daily pivots only. However, it can be extended to a longer timeline.
The Truth About the Perfect Trading Strategy – Does it Exist?
It combines Fibonacci retracements and extensions. Fibonacci trade can incorporate any number of pivots. This strategy is perfect for a ranging market. If you use it in combination with confirming signals, it works really well. If you are interested in Bollinger Bands strategy, this one is definitely worth checking out. These strategies are a favourite among many traders.
The reliability tends to be a bit lower, but used in combination with appropriate confirming signals, they become extremely accurate. Trying to chase the price when it goes upside rarely works. That is, unless you know this trick. This Forex trading strategy gives you a simple tip so you know whether the price will continue to rise or decrease.
This is more of a concept rather than a strategy, but you need to know this if you want to understand what the prices are doing.
This offer you a lesson in market fundamentals, which will really help you to trade more effectively. Currency trading strategies are a game of trial and error. It may be worth trying out the strategies from list above to see if any work for you. However, we will look at two further strategies which tend to be more common than the ones previously mentioned.
A lot of research is required to understand how to analyse markets, as technical analysis is comprised of a wide variety of technical indicators and patterns. Open a live account Unlock our full range of products and trading tools with a live account. Free demo account Practise trading risk-free with virtual funds on our Next Generation platform. There is no overnight risk. By definition, intra-day trading requires no trade is left open overnight.
Limited intra-day risk. A day trader only opens short-term trades that usually last around 1 to 4 hours, which minimises the likelihood of risks that may exist in longer-term trades. Time flexible trading. Day trading might suit people who desire flexibility with their trading.
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A day trader might enter 1 to 5 positions during the day and close all of them when objectives are hit or when they are stopped out. Multiple trade opportunities. A day trader can make use of local and international markets and can open and close many positions within the day. It requires discipline. Similar to other short-term styles, intra-day trading requires discipline.
Traders should utilise a pre-determined strategy, complete with entry and exit levels, to manage their risk. Flat trades. This is when some positions do not move within the day, which is to be expected. Stay alert for signs that the trend is ending or is about to change.
Also, keep in mind that the last part of a trend can accelerate as traders with the wrong positions look to cut their losses. Decide the timeframe in which to follow the trend and try to keep this consistent. Trend trading is suitable for people with limited time, after their trend identification system has been created. A prevailing trend may offer various opportunities to enter and exit a trade. Trend trades are often open over several days so they may incur more overnight risks than other strategies. However, this can be mitigated by placing stop-loss orders.
Scalpers do not hold overnight positions and most trades only last for a few minutes at maximum. Scalping is suitable for people who want to trade flexibly. Many trading opportunities. Scalpers open several small positions with a less defined criterion in comparison to other strategies, therefore there a lot of opportunities to trade on. Limited market applicability. Scalping only works in particular markets such as cryptocurrencies, indices, bonds and some US equities.
Scalping requires very high volatility and trading volumes to be worthwhile.
Learn more about volatility trading. Requires discipline.