Online Forex Trading

Forex Day Trading

Forex day trading is the most common form of speculative trading system in the Forex market. With the beginning of online trading day trading or intraday trading was revolutionized. Anybody can trade at any time from anywhere. All you need is access to your day trading account. You have to deposit a specific amount of money to start your trading account.

Forex Day Trading

Day trading means opening and closing a trade anytime within a day. A position is held by a day trader for a minimum duration of 15 minutes to maximum of a day. There are day traders who trade for longer term. Their profit ranges between a 10-15 pip spread. You must select the pairs or pair of currency you are intending to trade with and also read the price moments meticulously before entering into a position.

While reading the quotes you must take into account the BID and ASK prices. The price offered by the buyer is called as BID and the price demanded by the seller is called ASK. Once you enter a trade then you must let the price move as expected by you, and for you to make profits while closing the position price movement should be beyond the BID and the ASK price. It is always wise to buy while the charts are moving up and better to sell while the charts are going down.

The three currencies with a direct quote are Euro, Australian dollar and Great British pound. Direct quote implies that their values appreciate with an upward movement in the chart. Rest all currencies bear an inverse quote indicating a fall in their respective prices as the chart moves up.

Once you open a position expecting the price of a currency to move in a particular direction in the chart you can set a limit to which your profits or losses from the trade can be confined to. This is done with the help of “stop” and “limit” option. For instance, you have bought a currency and you want sell it within a day at a higher price. But unfortunately, the price drops and keeps on dropping then you can set a stop order at a particular level. This will automatically end the transaction by selling the currency at that point. This will save you from heavy losses.

In the same way, Limit order is set at a point where the prices are moving as per your expectations and you have already reached a profitable point in the chart. This will stop the trade by selling your currencies at that rate. This Stop and Limit tools are highly useful for online intraday traders because they might not be able to monitor the prices constantly during the day. They can set these options while entering into trade at the beginning of the day itself and leave for the day with the surety that there won’t be more losses than you can afford to take. This is an effective means to manage and minimize your risks in day trading.