The basics of day trading and forex
Forex day trading combines the fast-pace worlds of intraday speculating and foreign exchange trading – in the hopes of profiting from a currency pair’s daily price fluctuations.
Forex day traders take advantage of small market movements by speculating on the price of different currency pairs at least once within a day. An FX day trader will identify a trend in the price, look for an opportunity to open a position, and exit before markets close in a day.
This kind of trading focuses on small movements, often likened to similar short-term trading strategies such as scalping, but often with fewer positions opened and longer timeframes of exposure.
The forex market is very liquid, with trillions changing hands each day at a moment’s notice. This makes forex a popular market for traders that want to get exposure because of its volatility, without holding on to their positions overnight.
Day traders employ a wide variety of techniques and strategies to take advantage of the perceived market inefficiencies. And, as a result, typically need to react quickly to small movements in the market using technical and fundamental analysis.
