Things you need to know about day trading strategy

Day-trading or intra-day trading is a short-term trading style. Although being short-term, it’s different from scalping. Usually, a day trade is made during the day, which is again closed before the end of the day. And at the very beginning, a day trader generally picks one position from bull or beer, work in their favor, and close his trade with a loss or profit. They do not hold their trade until the next day.

If you have plenty of time to analyze, manage, and execute trades, you can be a day trader. Some traders think that swing trading is a slow trading style and scalping is a bit faster. They can choose day trading because it is neither slow nor fast. Now let us dive into detail.

Day trading is for you if you-

  • Like to start and end trades in one day.
  • Have enough time to monitor your trade the whole day.
  • You have to go to sleep knowing that you did not make a profit.

Day trading is not for you if you-

  • Like to tradein long term or short-term.
  • Have no time to sit before your PC and monitor your trade the whole day long.
  • Have to go to the office during the day.

Before jumping into day trade, remember-

You need to be aware of recent fundamental events to ensure a direction. Keep the updateson economic news.It will help you to make a decision early in the day. But make sure one thing; asyou have to monitor your trade the whole day, you have enough time.And if you havea job in the day, you need tofix the plan for combining your work with Forex. Be careful that you may be fired for always looking at the chart. In fact, it is better to trade the market with Saxo Bank as a fulltime trader rather than executing the trades randomly.

Now let us discuss the types of day trading. It has three types. They are – trend trading, countertrend trading, and breakout trading. But among them, trend trading is the most popular.

  • Trend trading

When trading is done by considering a timeframe and determining the overall trend, it is called trend trading. Traders usually look for whether the price movement is up or down, and they trade accordingly.  You can find your entry opportunities by using indicators in short timeframes.

  • Countertrend trading

This style is just like trend trading. The difference is that after determining the overall trend, we should look for trade opportunities against it. Here is a chance to end the trend where you will enter before the trend reverse. It’s a little risky, but the returns can be a lot.

Since we are thinking of “countertrends,” we will look for opportunities to trade on the opposite side of the trend in a shorter timeframe.Remember, to trade against the trend is risky, but the profit is much higher if you enter the market on time.

  • Breakout trading

When a pair makes a range at a particular time in a day and breaks in any direction, it is called breakout trading. When a pair moves within the tight range, this trading style works effectively. Because moving within a tight range indicates that the pair will move drastically within a short time. Your goal is to prepare yourself to trade in that move. In this trading style, you will determine the range where the price support/resistance is stuck. Once you have decided that, you will set your entry point up and down.

Day trading is a bit risky, and you need to have a lot of patience to be successful. So many traders do not like it at all. However, through day trading, you can make a massive profit by trading in a short-term trend. Moreover, in day trading, there is no risk of change in the market. And you always have a chance to alter your strategy. Just try to get yourself updated with the market environment and develop your plan accordingly. Within a short time, you can touch the pick of success.