What is Day Trading?
Let’s be clear about what exactly day trading Forex means. It can be defined as sitting in front of a trading screen for a meaningful continuous period of time and making trades that should substantially be closed by the time the trader closes up the computer and is done for the session.
A day trader might be scalping, meaning going for fast trades with very small profit targets of under 10 pips or so, or they might even be swing trading, trying to catch a daily move for as much 200 or so pips. Both can be day trading, if these trades are opened and closed within a single session.
The Challenge of Day Trading
Day trading is very challenging, both technically and emotionally. There are so many things that have to go right in order to consistently make money that it becomes very easy to lose. Most traders who try to trade like this are not successful. That does not mean that you cannot be, it just means that you have to be skilled, organized, and emotionally stable in order to have a good chance of winning.
It is not recommended for new traders to begin trading in a day trading style. Day trading Forex is very popular because it is exciting, because there can be a lot of action, and because it is easy to see all the intraday price movement and think this can be converted into lots of profit. A skilled trader might be able to do this, but it is nowhere near as easy as it looks. New traders are better advised to begin with position and/or swing trading, which is a much easier way to extract money from the market, and to build up their trading skills in the meantime. Once they have built a competence, they can later move into day trading if they want to.
If you are going to day trade Forex, you are going to need to be organized and systematic as to how you go about it. Here I’ll lay out a guide explaining how you might approach it. You need to plan several things in advance before the trading starts.
A Day Trading Plan
