Forex intraday trading /day trading is one of the most popular Forex trading styles, the basic principle is to trade during active market sessions, and one of the fundamental rules is to make sure to close trades by the end of the day.
Intraday focuses on the midterm and short term trend directions, and as an intraday trader, you look mostly to enter trades at the best entry points, ideally before the significant moves. Here are the seven things you must know to succeed as an intraday trader.
Trading sessions are an essential part of forex intraday trading. Professional day traders compartmentalise their trading or, to put it as simple as possible, they grid trading sessions into three segments, the Asian(Tokyo), European(London) and U.S(New York) sessions.
The structure plays a vital role because you can know which currency pairs will have volatility during which session.
For example, Asian currencies such as the Japanese Yen(JPY), Australian Dollar(AUD) and New Zealand Dollar(NZD) will be most volatile during the Asian session.
We can then expect Euro and British connected currency pairs to have volatility during the European(London) session because that’s when institutions and Banks in that timezone will be most active, making export/import transactions or releasing financial reports, the intersection of the London and the New York session holds the most volume as traders in London close their open trades and New York traders begin taking their first trades of the day.
Dollar pairs will be most active during the U.S session. Knowing the timing of each session will help you focus on currency pairs connected to the Trading session that you will be planning to execute your trades, and this will help you plan out your trading so you can catch trades at the right time.
Depending on your time zone, trading session times may vary. You must know session times. The diagram below is a standard representation of trading sessions.
2.Forex Intraday trading patterns
Markets are fractal, large structures consist of small structures, and small structures consist of micro structures.
Essentially this means that what you see on large time frames also happen on smaller time frames; as an Intraday trader, you have to get used to viewing charts from the 1 Hour time frame and the 15 minutes time frame, learning how structures form, planning your trades and executing them from these time frames.
3.Find consistency in trading high time frames
Consistency is built on the principle of repeatedly producing the same results.
Before you can be successful as an intraday trader, you first have to produce consistent results from larger price patterns. It will be hard to find consistency if you try trading using lower time frames because patterns on lower time frames tend to have an unclear direction, especially for people who lack experience in trading.
It is vital to gain consistency in analysing and trading mid-term and long-term price behaviour.
4.Keep your emotions in check
Most successful traders attribute their success to their ability to guard their emotions whilst trading. It is vital to put mechanisms in place that will help you stay calm when trading. As you trade and find a trading strategy that you are comfortable with, the last thing that you need is trust. Trust your trading strategy. If you have done enough due diligence and are sure that your system works, you do not need to panic after executing a trade.
Trading is much more psychological than you think. Never trade when you have many things in mind, this could affect your trading style, and you might find yourself losing your capital because you were distracted.
Your money management skill will set you apart from being a success or a failure in the trading industry. Professional traders always have money management strategies to cover themselves in case a trade fails, and it is essential to have a money management strategy. It will help you succeed not only as an intraday trader but in trading generally.
6.Have realistic expectations
forex Intraday trading is all about catching short-term and sometimes mid-term trends. You have to know the average daily movement of the pairs that you trade so that you can set your targets; once your targets are set, you have to discipline yourself enough to respect the targets you have set for yourself, not one pip more or one pip less.
Another point to keep in mind is capital. You can’t expect to make a million dollars in a week with a hundred dollars, but having daily targets and reaching them will gradually put you in a place where you will be closer to your first million dollars.
7.Strictly Follow your rock-solid forex intraday trading strategy
One advice successful intraday traders will give to you is to follow your trading rules. Nothing is frustrating as jumping into a trade without reason. That is a 50/50 gamble. Your ability to be consistent will be determined by how much you respect your forex strategy, which will help you minimise your loss and maximise your gain.
currency Trading is just like a business. In business, every company has its way of doing things, and so should you.
Advantages & Disadvantages of forex intraday trading
|Forex intraday trading-Advantages||Forex intraday trading-Disadvantages|
|Any forex day trader can open and close positions within the end of the day. Thus, he doesn’t need to be charged swap whether he makes a profit or loss.||A Swing trader finds more profitable setups as swing trading doesn’t need to close trades on that day which is a big disadvantage for forex intraday trading.|
|Most of the forex strategies were developed based on a day trade. Thus any day trader chooses his suitable day trading strategy from many advanced forex day trading strategies.||Trend trading and position trading are two forms of forex longer-term trading strategies which are not possible in day trading.|
|News trading is perfect only for day traders. Swing traders or position traders can’t take trades based on single news like NFP or FOMC.||In swing trading and position trading, in most cases, traders need to take trading decisions based on fundamental analysis, and traders get much time which is not possible in forex intraday trading|
|There are many forex strategies like relative strength index strategy, moving average strategy, breakout trading system, price action forex trading strategy all are available in forex intraday trading.||In forex intraday trading, forex brokers play an important role. If you don’t choose your forex broker wisely and consciously, then a scam broker can eat out all your profit by the names of spread. But for swing trading and position trading, spread doesn’t matter. as for longer-term trading, you will not enter and exit your trades too quick; rather, you will hold your position till you gain or lose at least 150/200 pips. So spreads don’t affect you so much.|
|Any broker accepts you as a day trader. And it won’t charge you any extra charge. But if you are a swing trader or position|
trader, then you need to hold your position for even more than 8/10 days. Then your broker will charge you extra costs for holding your positions, such as longer times.
|In forex intraday trading, you need to use forex indicator and technical analysis tools too fast as you plan to exit the positions at the end of the day. But if you are a position trader or swing trader, then you have much time to analyse the forex market with these technical analysis tools.|
As you enter and exit the same day from the position, you need to target only a few pips and open positions on a large lot size. So in day trading, even a little price movement can cause you a huge loss.
|For forex intraday trading, we need to focus on a handful of currency pairs. But swing traders or position forex traders can easily trade major 28 currency pairs and maximise profit.|
|Algorithmic trading is possible in both swing and position trading, but it is impossible to add more positions or follow algorithmic trading on intraday|
trading for the shortage of time duration.
Forex Intraday trading is like a marathon. It is not about how you start. It is about persistence and perseverance even in times of hardships and doubt. Great traders like Paul Tudor Jones, George Soros and Warren Buffet, to name a few. were once students, and they mastered the art of trading through trial and error. They got where they are because of a will to succeed, burning desire and determination. As long as you put in the work, you will also succeed in the forex markets.
Q. Can I do intraday trading in Forex?
A. Yes, intraday trading can be done in Forex.
Q. Can I become rich from intraday trading?
A. Yes, you can become wealthy from forex intraday trading. Depending on your capital, profitability, consistency, and other factors, it might take a long or short time.
Q. What does intraday mean in Forex?
A. Intraday means trading within regular business hours. Like if you open any trade today, then you need to close and book your profit or loss at the end of today.