This article looks at the use of intra-day FX rates trading.
When you look at trading on the forex market you should consider intra-day trading. This is a form of day trading that you can use on the FX rates market. It is important that you understand what you have to do with this trading as well as the theory that this trading is based on. There are also a number of rules that you have to consider in order to limit the losses that you can make with this FX rates trading. If you do not consider these rules you will not be able to determine whether or not the intra-day FX rates trading system is right for you.
What is Intra-Day FX Rates Trading?
The first point that you have to look at is what intra-day trading actually is. This day trading strategy has you looking at the movements on the forex daily charts. You will not be working on any movement other than these ones. To make a profit you are going to be taking advantage of the trends within these charts.
The Tools You Need to Trade
When trading with this strategy you are going to be looking primarily at technical analysis. There are some traders who will look at the use of fundamental analysis in addition to the technical analysis. If you are one of these traders then you have to ensure that the fundamental tools you are using will impact the market in the timeframe that you are looking at.
For the technical analysis that you are going to be completing you will need trend finding indicators. These indicators will be able to tell you about any movement on the market that you are going to be able to make a profit with, in this timeframe.
The Rules of Intra-Day Trading
There are a number of rules that you have to consider when you look at intra-day trading. The first is that you should only trade with what you can afford to lose. This is a rule that you should follow with all trading, but the increased risks that you find with this trading make this more important.
Another rule is that you should look at using only highly liquid currency pairs. The best currency pairs for this trading will be the commonly traded ones because of the liquidity that you get. When you look at currency pairs with low liquidity you are going to find that the movements can be too unpredictable for this type of trading.
The third rule that you need to follow is to only have a couple of trades open at a time. There are many people who make the mistake of having a lot of different trades open at one time. When you do this with intra-day trading you are increasing the chances of you making a loss.
When you trade with this strategy you will need to have clear entry and exit points. The fast and strong movements that you find with this trading make this very important. If you do not have set points you are going to increase the risks that you trade with and you will be increasing the potential losses that you could make.
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