Day trading guide

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Day trading on the forex market is a well-known short-term trading policy, which allows the purchase and the realization of economic instruments together to close positions at the end of the day to profit from not very large changes in value.

Just like a day trader, you can be your owner. You can trade from home, from the office, or during the trip – due to advances in mobile technology. But day trading in the forex market will not suit absolutely everyone, as well as in the first place do not start trading in economic bazaars, you should understand certain factors. In this tutorial, according to forex trading, I will tell you about day trading in England and also analyze certain well-known trading strategies. I will also talk about the psychology of a qualified day trader and also analyze certain basic recommendations according to the strategy.

What is day trading?

Day trading is a short-term policy used by traders to purchase as well as sell economic instruments with the aim of closing positions at the end of the day. In recent years, the concept of day trading on the forex market in England has gained considerable popularity.

Technological processes have played a significant role in this – due to high-speed broadband and mobile communication I have a huge amount of data on trading in the order of the present period. This has led to the fact that without exception more and more people go to the markets with the support of day trading, i.e. do operations during the day, trying to get income from the volatility, if the values in the trade increase as well as fall.

However, which strategies can you apply? Is it necessary to follow the usual strategy or use something more complicated?

How to use technical analysis for day trading

Numerous day traders apply industrial research by analyzing price charts, such as candlestick charts, as well as advising a “clean” aspect of their trading strategy. Such traders choose not to load their charts with a large number of different indicators to try to recognize the flow of movement. They choose to understand only the value, what is often referred to as “value trading”. In the presence of this kind of trading, you have certain basic guidelines based on what has been done before, which can help you plan upcoming operations.

For some day traders, the highs as well as the highs of the previous day are considered significant degrees, which must be considered in the presence of planning a strategy in this period. This is absolutely reasonable: the recent maximum denotes a period if the mood changed and traders returned to the exchange, pushing the cost down. In this way, according to the single judgment of the trade, the value was very high. And also, certainly, as the minimum of the last day demonstrates, in which place consumers again took conviction in themselves, thus as well as felt that the stock exchange is undervalued – they voted with their own wallets and also bought. These degrees have all chances to be significant, in case they arise again, and also have all chances to be the foundation stones of a day trading strategy.

Day trading strategies

Day trading strategies differ from long-term strategies in that they are heavily focused on generating profits from short-term moves in trading, as opposed to moves that take place over many days or months. Day traders must be regularly focused because in short-term opportunities the markets have all the chances to change unexpectedly. Short-term strategies are especially effective in volatile markets, for example, in oil trading.

No single policy operates regularly, but also a regular day trading policy can help a trader to try to set up operations with low risk and also significant benefit in significant factors during the day. Certain traders also use the failure of one operation as well as a chance to solve another. If the degree pierces, this can indicate the basis of the newest direction, which provides another chance to try to acquire income. Efficient day trading activity in the futures exchange is often able to cause traders to be given the result for day trading, in case their income will be higher than the denomination.

How to day trade

  • Open an account. If you have a live account, you automatically get access to a demo account where you can practice with virtual funds.
  • Choose your product. We offer spread betting and CFD trading, which are derivative products. In particular, spread trading is tax-free in the UK*.
  • Take a look at our range of financial markets. We offer trading in over 10,000 financial instruments across equities, commodities, forex, treasuries, and indices.
  • Decide whether you want to buy or sell. Determine entry and exit points depending on how you think the price of an asset will rise or fall.
  • Keep an eye on the news. If you are day trading stocks or currencies, these markets may be affected by important news or economic events in the short term.
  • Use risk management tools. Stop-loss orders help you close a position if the market moves against you, thereby minimizing the risk of capital loss.

Day trading example: GBP/USD

Since the morning of April 22, English day traders have had the opportunity to take a look at the highs as well as lows of the previous day in the widespread monetary two GBP/USD. During the previous day, if the cost went back down to the degree of 1.4300, consumers returned to the exchange. Of course, it was impossible to foresee what would happen on April 22, but there was a possibility that the degree of 1.4300 would be significant for trading in this period. It was assumed that consumers would re-enter the exchange before the estimate of 1.4300.

Day trading: support and resistance

Just as it can be seen from the video graph, directly in this way and also happened. For a long time, there were two incidents, if the direction of GBP/USD moved to this degree, going down to 1.4320. A day trader would have the opportunity to analyze the chance of buying here, as there was a need in the previous period.

Another significant superiority of using unconditional degrees of assistance as well as counteraction, similar to this one, in order to plan transactions is considered risk management. Of course, day trading on the forex market is a desire to acquire income, but it is no less important to reduce losses if everything without exception does not go according to the project. If the direction of GBP/USD fell further than the degree of 1.4300, in this case, undoubtedly, something has changed, and also with the day trading is possible to exit together with a small controlled loss.

Day trading tips

Follow your own rules

Science is one of the main qualities of experimental traders. Watch out for your malicious habits and also try to get rid of them as accurately as possible. You carry out trading collected, in case you have established a carefully considered set of laws to make trader’s conclusions and then follow them. Find methods not to provide yourself in any way to violate the principles and also try to find a solution to this issue, in case it is a question. For day traders, it is rational to make changes to their principles at the end of any month, as this way of trading has the shortest transient period.

Manage your money

Wealth management is considered an important component of day trading. It is the only one of the main components of trading in each short-term interval. Of course, if you are going to trade for numerous years, you should use effective wealth management strategies. There are single books dedicated to this problem, including a large number of different layouts, and you should spend a period to find a way that satisfies you. The risk/reward match is of great importance. Remember, it doesn’t matter if you win 90% of the time if your losses are much larger than your wins. What matters is that the wins are greater than the losses.

Always use risk management

Do not forget to use stop-loss orders to manage your own risk if you expose orders to access the exchange. This is your insurance. Before entering an operation, you must clearly understand where your stops should be. This is an excellent way to help protect yourself from trades going against you. Typical stop losses have all chances to be prone to slippage in the presence of price gaps, but guaranteed stop losses will always cover the view in the degree you choose.

The psychology of day trading

  • Act decisively when you have formed an informed opinion.
  • Remain calm. You should always try to remain calm – this is especially true when you are facing losses. Stay calm and act according to your rules. Work out the worst-case scenarios in your mind so that if they occur, you will be prepared and remain calm. Remember that when trading with leverage, your losses may exceed the amount deposited in your account. Some brokers offer cash accounts for day trading, which helps to reduce risk because leverage, short selling and pattern day trading are prohibited in such accounts.
  • Don’t let the opinions of other traders influence your trading strategy. Sometimes other traders give their opinions about the market and advice without considering your trading methodology. If you need advice, ask a qualified professional who can evaluate your trading style and give their insights without throwing you off course.
  • Be patient. The importance of patience in trading needs to be emphasized. If you can’t find any suitable trading opportunity, don’t trade for the sake of it. As you become familiar with the market, you may find that figuring out when to open or close a trade becomes easier. Intuition is something that sharpens as you gain trading experience.
  • Keep an eye on your stress levels. Day trading can be stressful because it requires constant attention and motivation. You can counteract this by taking the time to think about your priorities. Take a different perspective on trading and its place in your life. Increased stress levels can have a negative impact on your trading decisions, so if you feel your stress levels rising, it’s time to distract yourself. You can come back to trading later when you are in a good frame of mind.
  • Take a flexible approach. When trading, you also need to be flexible with your positions. Market conditions can change quickly, so you need to be flexible in your approach. You must be willing to adapt to changing market conditions and change your trading strategy accordingly.
  • Stick to your chosen market and specific timeframe. These are two parameters that you can control in an environment where things can change very quickly.
  • Never be afraid to realize your profits. If you find yourself exiting a trade with a profit but the trend continues, don’t regret your decision. You made a profit, so start looking for the next opportunity. If you are concerned that you often exit a trade too early and miss your opportunities, you can develop and try out a re-entry technique.
  • Keep detailed trading records. When you enter a particular trade, you can write down the reasons why you entered it. This will help you in the future as you will be able to evaluate your past trades and learn from them. Keeping good records and accurately stating the reasons why you entered the trade will enhance your learning curve.
  • Have a clear idea of whether you have achieved the level you had hoped for. After you have been day trading for a month, take some time to evaluate your progress. Look at your trades and ask yourself what you would do differently if you could repeat that trade. This will help you become a more consistent trader in the long run.

Practice on our day trading platform

Our award-winning day trading platform** Next Generation comes complete with technical indicators, social trading commentary, and updates from our professional market analysts. This makes it easy for novice traders, as they will never be short of tips and strategies for day trading in the financial markets.

For those who are already familiar with this software, we also offer trading with the globally recognized MetaTrader 4 platform. It is important for you to choose the best day trading platform to suit your trading style, so we have prepared a guide to compare our trading platforms in terms of prices, features and tools. Find out more by clicking on the link.

Day trading on-the-go

Our day trading software is also available on the go with our award-winning mobile app. It is suitable for both iOS and Android mobile and tablet devices, making day trading easier and more convenient wherever you are. Features of the app include mobile-optimized charts and customizable layouts, as well as full-order ticket functionality. Read more about our day trading app.

How to start day trading?

When you open an account with us, you can start trading more than 10,000 instruments in the financial markets. Visit our Trading Costs page for more information on spreads, margin rates, commission fees and overnight holding costs – all of which traders should consider before opening a position.

Day trading summary

Day trading is a common method of short-term trading because it focuses on small price movements and does not run the risk of overnight gaps. Many day traders rely on price charts and technical analysis to form their strategy, but whatever strategy is chosen, it must meet several principles. These include the use of risk management tools and the ability to maintain composure despite a rapidly changing and highly risky market environment.

**Taxation depends on individual circumstances and may vary or differ in non-UK jurisdictions.

**No1 Web-Based Platform, ForexBrokers.com Awards 2020; Best Phone and Email Customer Service based on highest user satisfaction among spread bettors, CFD and FX traders, Investment Trends 2020 UK Leverage Trading Report; Best Platform Features and Best Mobile/Tablet App, Investment Trends 2019 UK Leverage Trading Report.

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