Forex Day Trading – Is it Right For You?

Forex day trading is something that appeals to a lot of forex traders and it's easy to see why. Currencies trade in quite a wide range every single trading day so there are always good profits to be made. However forex day trading is definitely not for everyone.

Trading in general requires immunity discipline and this is particularly the case when trading over short time frames. Prices can move very fast during the day and it's very easy to make impulse trades based on nothing other than gut feeling. This is generally not a good idea and will usually only lead to disaster in the long run.

Day trading is no different to longer term trading. You have to have a solid and profitable system in place before you even think about entering a position. This means doing an awful lot of paper trading and back-testing until you find a system that could potentially make you money.

Day trading is extremely difficult because if you watch the charts of the major pairs every single day you will soon start to see that a lot of the price moves are simply noise. By that I mean random price moves that are an inevitable part of every trading session. You do get strong trends at times but a lot of the time the price just drifts up and down aimlessly.

This is why longer term trading is generally a lot easier because by using 1 hour charts and upwards, you are eliminating a lot of this noise. Therefore it's much easier to make consistent profits because the technical indicators that you use will generally be far more reliable.

Of course it is possible to make consistent profits from short term trading but it requires a high degree of skill and expertise. You generally need to have quite a high success rate because it's hard to let winning trades run on short time frames, and you need to learn how to accept losses because of these smaller time frames that they are inevitable. You also need to keep these losses small and under control.

If you can do all this and are extremely disciplined then it is possible to become a highly successful forex day trader. It's certainly not for everyone though and my general advice would be to focus on longer term trading because it's so much easier than day trading.

Source by James Woolley

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