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Chapter 30, Part II. What Type of Trader Are You? Page 4

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 27, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    Day Trader

    This type of trading is a bit slower than scalping, but still, it limited to a single trading day. If you feel that scalping is too fast, but you do not want to hold position overnight – forex day trading could be your variant. The feature of day trading is that the trader usually makes 1-3 trades during the day, based mostly on 30 min – 4 hour charts. Lower time frames he uses for searching for patterns that could give him/her the trigger point. This type of trading is not so tough, since it lets you prepare to it in the beginning of the day and has much less emotional, tense and physical anxiety during the day than scalping. After entering the trade (or when you are just waiting for it to reach entry point) you can dedicate yourself to some other short-term occupation around – for instance study in a trading-room, reading forex books or creating a trading plan for other markets. Still this type of trading demands some issue that will not be suitable for most people. Although you’re not so stressed and glued to your charts – it demands you to keep on eye on the market from time to time and especially when your alert on entry/exit points will call. So you always have to be somewhere around. Usually day trader closes all positions by the end of the day.

    Here are some specific issues of forex day trading:

    - acceptable speed of thinking – you have a lot of type to prepare;

    - Just monitoring of position and alerts through the day. Close focus on action only during the execution of trades. So, day trading couldn’t be combined with day job – you have to be always somewhere around.

    - Demands more patience than scalping and discipline;

    - Demands not such fast mind – you probably will have a lot of time to reassess the current situation if your initial plan was destroyed by price action;

    - Day trading still demands some knowledge of market mechanics, sharpness in trade execution and order placement;

    - Since this is still intra day trading - expenditures on software and hardware are solid;

    - Result of trading is more as single trade result now, since number of trades within the day is small;

    - positions are typically closed by the end of the day;

    - Demands much more attention to previously happened news and events because the market feels significant impact by them. This will help you to estimate market direction.

    - Almost any pair is acceptable for trading, maybe except some extra-exotic. Spreads are not so crucial here.
    stephen rabehajaina likes this.
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