This article looks at whether or not you should be using day FX trading.
When you look at FX trading you will see that there are a number of different timeframes that you can trade in. There are a lot of people who assume that day trading is the best option of all the timeframes. However, you have to consider that FX trading on the short-term is not actually the best option for all traders. It is important that you consider whether or not this type of FX trading is right for you. To do this you will need to consider the trading that you can do, the stress of the market and the trading personality that you have.
What is Day FX Trading?
The first point that you have to consider is what day FX trading is. Day trading is an umbrella term that covers all the short-term trading that you are able to do. Short-term trading will be done within a single day and you will never hold a position open over night. When you do you will move out of the realm of day trading and into medium-term trading.
There are a number of different strategies that will fall into day trading. Any strategy that lasts under a day can be used by a day trader. This means that you are able to trade with the trend, with the range or to scalp the market.
The Type of Trading You Want to Do
When you consider whether or not day trading is right for you, you have to look at the trading you want to do. As you are able to trade with any type of trading you have to look at whether or not you are comfortable with the timeframe. There are a lot of traders who are not comfortable with trading in the short-term timeframe. These traders will be more comfortable with the long-term trading that you can do on the forex market.
The Stress of Trading
To determine whether or not you should be using day trading you have to consider the stress of trading and how you will cope with this. Day trading is the most stressful of all the trading that you are able to do. This is due to the fast-paced nature of the trading and the decisions that you have to quickly make. When you day trade you will also have to keep a constant eye on your trades, the overall movement of the market and the forex news. All of these factors will affect the profits that you make and they will all increase the level of stress that you face when trading.
Your personality will affect all of the trading that you are able to do. If you do not have the right personality for day trading then you are not going to be able to make a profit. It is important that you know about the trading that your personality is right for and whether or not this is day trading. If you are an emotional person or someone that likes to deliberate over a decision then day trading is not going to be the right option for you.