Day trading is a very common term in forex. It refers to pursuing forex operations (buying and selling currencies) within a single trading day. Thus, foreign exchange traders buy or sell currency pairs of their choice once within a trading day, or even multiple times, to reap the maximum benefit of small market movements.
So, how profitable is day trading in forex? Is it even profitable or just a myth? We have given the ultimate answers to all such questions in forthcoming content. So please read carefully.
Is it beneficial to day trade in forex?
Yes, forex day trading can be extremely beneficial and profitable for traders if their trades succeed and the trader is patient enough to focus and analyze the price chart.
However, there are some risks involved in forex day trading as well as it mainly includes a capital loss on a substantial level.
Trading pairs of currencies on forex margin ( such as spread bets or CFD trades) can expose the trader to some more risks. Unexpected events can also cause volatility in the FX market, leading to aggressive usage of leverage, ultimately resulting in traders suffering from significant losses.
It is important to remember that stop-loss orders do not guarantee that the trader’s position will get closed out at the predetermined price. The same is why we can call forex day trading a double-sided sword. It can drive your benefits only if you are well-acknowledged about its usage and have enough skills to handle the risks. Otherwise, the case can get where you can harm yourself.
How to do forex day trading
Now that you know all the essential information about the benefits and risks of forex day trading, let us jump into the procedure you can start up as a forex day trader.
- Open a live trading account: a forex trader needs newshunttimes to collaborate with any forex brokers and open a live trading account to pursue trading operations. Hence once you are done exploring the forex world, and learning its basic tactics with a demo account, open a live account with a brokerage house of your choice.
We suggest trying an Exness ZAR account as it keeps all of your funds in Rand so that you can have quick and convenient access to your funds.
- Choose your products. Here, you will get 2 options: Spread betting and CFD trading.
- Consult a day trading guide to learn the basics of day trading
- Use your knowledge of technical analysis to study price charts and other technical indicators. It is a crucial step as it will let you know about current trends and help you make an accurate choice.
- Consider utilizing risk management tools to protect your capital.
Forex day trading can be profitable if you obtain proper knowledge and skills. However, if you are a newbie trader, it can lead you to substantial losses.
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Hence, read all the points we have mentioned under the heading “How to do forex day trading” to avoid all the risks of loss.