Intraday trading is a set of Forex day trading strategies that require opening and closing trades on the same day. Considering that markets can only move so far within one day, intraday traders use risky trading techniques to gain their profits. Trading within such a narrow time frame, your risk will be much higher than using long term trading strategies.
Day Trading traders depend mainly on two main factors, higher volatility and liquidity. Volatility is the magnitude of market movements. With volatility is in consideration, day traders will be looking mainly at the major currencies and other instruments that are highly volatile, in addition, they should consider the economic news and trading sessions during which the market will be volatile. Liquidity is similarly important. If there is no liquidity, the orders will simply not be closed at the expected profit.
Day trading strategies
Scalping, is a day trading strategy that through which you may make many small profits on the minimal price changes. Scalpers go for quantity trades within the shortest period possible.Scalping can be a great day trading strategy, at the same time a very risky one. Scalpers must achieve high trading volumes to balance out the low risk to reward ratio. One the other hand, a scalper must know when to exit a trade as they can't afford to wait for the market to come back.
Reverse Trading is also known as pull back trading, counter trend trading and fading. A reverse trader should be able to identify potential pullbacks with a high probability, and to be able to predict their strength. This strategy is simply trading against the trend, how risky is that! A popular example of reverse trading is Daily Pivot trading which is trading the daily highs and lows.
There are several other strategies that can be considered as daily short-term trades. You may think trading short term is very profitable as you may achieve several profits within a short time period, but what you should keep in mind that the risk in such strategies are much higher.
What kind of trader are you? Short or long term trader? Join the discussion and share your trading experience and style.