Day Trading

Day trading is a style of trading when deals are conducted within a single trading day. As a rule, time intervals between opening or closing of trades may reach from several minutes up to several hours. Day traders employ a great variety of strategies and techniques, aiming to profit from the smallest price fluctuations, and this goal can be achieved through patience and self-discipline.

To get favorable results at day trading, it is essential to make the right forecast on the price movement, as many external factors contribute to high volatility in the currency market. Day traders need to keep abreast of the market situation, collate facts and make conclusions about the price behavior. For this purpose, technical analysis can be of help. It is also important to have a good reaction to be able to find entry and exit points quickly at opening or closing of trades.

In fact, there are numerous strategies that are used by day traders, and here are some of them:

Scalping: this strategy implies that numerous short-term deals are made during the day which are closed immediately after they gain any small profits.
Range trading: traders using this strategy base their trading decision on the price location relative to support and resistance levels.
News trading: this strategy suggests that some significant market events can cause heightened volatility, thus providing trading opportunities.
High-frequency trading (HFT) implies the use of certain algorithms. Traders applying this strategy aim to benefit from small or short-term market inefficiencies but most brokers forbid such practices.

Some say that day trading is a sure-fire way of getting rich. Is it?

No, it is not. Indeed, some scammers promote an idea that day trading can bring you decent profits in no time, thus luring beginners and inexperienced traders. However, one should be cautious as there is no such thing as a free lunch. To make money by day trading, you should possess knowledge and expertise. In fact, many experienced traders prefer to avoid day trading, arguing that in most cases, the profit does not justify the risk. At the same time, supporters of day trading believe there is profit to be made. It is possible to profit from making deals within one day, but it’s harder to achieve success because of the complexity and high risk of day trading.