Currency Day Trading – The Top Strategies

Is currency day trading for you? Day trading in the Forex market is a fast moving trading style that is not for everyone. The level of leverage can be very dangerous, especially if you don’t have the right risk management strategy in place.

However, as with any other trading disciplines, you can make profit and become successful if you practice and learn enough before entering the market.

Firstly you need to decide if the day trading time frame is right for you. Then you should select a strategy or a group of strategies that work together to trade currency pairs.

Your personality is the key for becoming successful in day trading. Intraday traders normally use minute charts to analyze movements and take advantage of opportunities that arise frequently. Transactions costs can be higher due to the high number of spreads to pay and it can be mind changeling due to the speed, but there is no overnight risk.

After feeling comfortable with the day trading characteristics it’s time to move on to some currency trading strategies.

You can approach the Forex market using fundamental or technical analysis.

In fundamental analysis for the Forex market you analyze a specific country situation which directly affects its currency fluctuation. Normally this task is very time consuming and only carried by big investment firms. However you can subscribe to reports or associate with an experienced mentor.

One strategy based on fundamental analysis used by short term traders is known as News Trading where traders take advantage of economic news events from around the world. You need to find a good source of information and use a forex broker experienced with news trading.

Technical day traders use different styles or strategies to enter the Forex market. Some of these strategies are: Scalping, Trend Trading and Range Trading.


Scalping is a very short term trading style that attempts to make several small profits throughout the day. Scalpers use technical analysis based on price movements to make their decision.

A well known scalping technique uses the market’s time and sales to determine when to make trades. Time and sales shows each individual trade as it occurs, and is usually displayed as a scrolling list.

Trend Trading

Trend trading involves short term trades that can last a few minutes or even hours. Traders analyze charts to identify current market direction. It assumes that the currency which has been rising steadily will continue to rise.

Range Trading

Range trading is a strategy used when the market is moving sideways. A currency is trading in range when every time it hits a high, it moves back to the low, and vice versa. The trader buys the currency near the low price and sells it at the high.

Get more familiar with one of the above strategies and practice the technique enough before putting your real money in the market. You also need to get a robust software package with market data to enable you to create charts and analyze price movements.

Day trading in the currency market is very popular due to its high liquidity and volume. Learn the basics, start with a low budget and you will be able to trade with confidence over the long term.

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