Forex Day Easy To Use Trading Techniques and Strategies
Forex day traders use different strategies and techniques to capitalize on currency pair movements for profits. Effective and consistent trading strategies rely heavily on complicated and easy technical analysis that utilizes patterns, charts, and indicators to predict the currency market movements. Some of these techniques include using asset-specific and automated strategies, among others.
Many day traders assume that using highly complex technical analysis indicators is the surest way to succeed in the volatile intraday currency market. However, if you are a novice-day trader, you can start from the basics before working your way up to technical indicators’ complexities and still make successful gains. You have to take into account that day trading is risky, whether you are using basic trading strategies or complex technical analysis indicators.
If you do not have the time to learn day trading from the basics, you can open an auto trader account with experts such as Juno Markets to monitor the currency market in real-time. The same experts also provide you with demo trading accounts that allow you to learn from trading mistakes without the fear of losing your real money. The following simple trading strategies and tips will have you trading within the shortest time possible without worrying about the complicated techniques.
Forex Day Trading Simple Strategies and Tips
1. Demo trading account
As mentioned above, the first step to profitable trading is by opening a demo trading account. A demo account stops beginners from trading real money before gathering sufficient currency market experience. In many of these cases, results are devastating as they result in massive losses, some of which discourage the newbies to give up trading for good. Opening a demo trading account is free, and the majority of them allow virtual cash trading without depositing anything. Other benefits of trading with a demo account include-
- Experimenting with high leverage levels
- Using large trading capital percentages in a single trade
- Gaining practical experience about the most common trading mistakes
- Testing different strategies to find the ones that work best for them
- Choosing leverage levels, they are comfortable with
- Record and track their trading performances, complete with losses and profits that help in forming realistic potential payout expectations
- Get an idea of the volatility of the financial market
2. Closing all trades at the close of business
Many day traders choose to close their trading at the close of business primarily because of two reasons.
The first is the fear of profound changes affecting a position left open overnight and finding unpleasant results on returning to the trading platforms the following morning. Some of the changes could be news releases that could negatively impact currency pairing and the major global financial players’ different trading timeframes.
The second factor is the overnight currency pair holding positions rollover fees charged by forex brokers.
3. Focusing on news releases
If you are a beginner, focusing on the latest announcements is more helpful than focusing on and understanding complex technical analysis, moving averages, charts, patterns, and Bollinger bands. Economic news releases, on the other hand, show expected volatilities throughout the financial calendar week. Traders can get some idea of what to expect by comparing previous releases to the latest numbers.
4. Trend following
Instead of focusing on identifying and capitalizing on counter-trend tactics and breakouts, you could focus on trend following. Trend following idea is to analyze currency pair charts with SMA or EMA to confirm open positions, uptrend, or downtrend.
5. Correct setting of profit/loss ratios
Setting the correct profit and loss ratios enables forex traders to succeed with winning trades of 40 or 50 percent. However, it is crucial to note that the method, just like many others, does not guarantee a success rate of 100% and everything also depends on the trader’s decision.
Wrapping it up
Day trading comes easy for some traders, while for others, it is an uphill task. If you are new to the currency market, you do not have to start with complex technical analysis techniques to get ahead in the game. Start with the above simple strategies, and build your way up. If you cannot do it yourself, you are lucky because there are many experts to help you along the way.
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