Day traders pay extra attention to two things, trade risk and daily risk.
Do not take risk control for granted and make sure that each time you trade, you can handle multiple losses in a row.
that is not true.
that is the pure definition of a bucketshop.
you are suggesting that every metatrader broker across the board is a bucketshop.
you is not correct.
Forex day trading is a popular strategy that focuses on buying and selling currency pairs within the same trading day. It is a short-term trading strategy where traders place a number of trades per day and close them by the end of the trading day, with no overnight positions.
Day traders tend to make use of price fluctuations of currency pairs with high liquidity, which can provide plenty of profitable opportunities. Day trading targets the currency pairs that are highly liquid and volatile.
Forex day trading is popular mainly among retail forex traders. It’s believed to be a quick way to make profits. Forex day trading suits traders who have enough time to monitor, execute, analyze prices and track their trades throughout the day.
Since forex day trading involves reacting to short-term price fluctuations, it requires discipline, focus, control, and the ability to stick to a clear trading strategy.
Tips for Successful Forex Day trading
- Setting your risk tolerance level is critical. Your appetite for risk will impact your trading decisions greatly, and it is a leading factor in finding a proper trading strategy. Follow clear risk management rules.
- Develop a trading plan and stick to it no matter what happens.
- Short term trading strategies usually entail a great risk exposure due to the high number of trades. Consider testing your new strategies in a risk-free demo account before applying them to your live trading.
- Since you’ll have to make multiple decisions in a considerably short time, your decisions should be based on technical or fundamental analysis.
- Do not overlook key factors such as volatility and liquidity when choosing your trading tool.
- Choose a reliable broker with an advanced trading platform to ensure instant execution of your trades.
I am not sure that someone will disclose some real secrets which can change your trading results immediately. The main secret is self-discipline and patience. These two factors will help you achieve decent trading results with the passage of time. However, I wouldn’t call this approach a secret as everybody knows that they are necessary for the success in trading.
Thank you for sharing your knowledge. I’ve only lately begun day trading. I’ve been on the lookout for some useful material to aid in the development of my own day trading strategy.
I used to be a day trader and I think that the secret which could save me lots of time is to switch to the swing trading. I mean that my trading has become more consistent and predictable and my life has become much more intresting just because of the fact that now I don’t need to sit all day long before the computer screen and I can devote much time to the things which make my life better. I feel that the scalpers and day traders are just the slaves of the market and their daily routine is quite the same as if they worked at a traditional 9 to 5 job. But that is just my opinion about all of this, it is pretty subjective.
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@Biebkosh Yes, it is subjective. You may not like to trade all day but there are people who are happy to make decisions all day and find it quite exciting. Day traders and scalpers feel their life interesting that way. It is fine to choose a strategy that suits your trading style and devoting yourself to it.
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Day trading is definitely a hard option. But here are some secrets which I found from day trading:
*** Knowledge Is Power**
With instant communication, an event the other side of the world can quickly affect your market. As a result, having access to reliable news sources is more important than ever. However, some resources go above and beyond reporting breaking news. They also offer in-depth insight and commentary. All of which may enhance your ability to predict future price movement.
*** Economic Calendars**
The next of our day trading secrets to be exposed is a tool often overlooked by traders, an economic calendar. They simply track the occurrence of market-moving events. Yet when used correctly, they can also help you to anticipate and organise a plan around a future occasion.
*** Enhanced Analysis**
Some say you are only as good as your technical analysis. That is why ensuring you have powerful charts and tools at your disposal is vital. It is also why in this list of 7 secrets to day trading success, eSignal deserves a mention.
Whilst the standard charts you get from your broker will make do for a while, eSignal is the place to go when you are ready to upgrade.
*** Practice Makes Perfect**
Profiting from intraday price fluctuations requires more than knowledge. It also requires practice. Too many people lose their hard-earned capital from early mistakes that would have been best made in a demo account. So, these practice accounts are the perfect place to get familiar with market conditions and hone a strategy.
Its perhaps very revealing that you mention that day-traders find their lives exciting. Emotional gain from the activity of trading isn’t something most experts would encourage.
In important senses day-traders are emotional traders. They start day-trading because they fear holding over-night. They fear holding over-night because they are inexperienced and have small accounts. They are also day-trading because they are impatient and greedy for quick affirmation and profits.
Oh, I know they will state with a straight face that their individual trades conform to a rational plan and the sharpest of TA. But that’s like arguing over the relative quality of tea-leaves when you’ve already decided they can reveal the future.
This may be true in some cases, especially amongst newcomers, but it is certainly not true in all cases. I have day-traded for some decades and have no intention to change. It is not a case of “fear” at all. It is purely a question of finding what suits your character best.
I do not sit at a screen all day. I check in hourly on the hour and often not even then when it is clear that a signal to act is far away. The reason I day trade is because I like to see an immediate response to my entry and a good result with minimal time exposure to unexpected events. Most of the time I am not in any market and I do not need to carry positions in my head. It is incredibly relaxing to be able to decide when I want to trade and when I have other things to do.
It is also very relaxing not to have to worry about missing out on trends and whether the market is suddenly going to reverse on me. It does not matter to me what the market does overnight, every day is a clean sheet and you just patiently wait to see if anything happens. If and when it does then you enter with a target and stop and wait… Simple, methodical and entirely relaxing 
Yes, I will certainly state that with a straight face. I trade strictly according to a TA set-up. I look at the daily chart for the overall state of the market, then the 4-hour to determine where we currently are in that daily scenario, and then drop to the 1-hour chart to identify my entries according to what I am anticipating. If it doesn’t happen I don’t trade. If it does, then I am in. Sometimes, after entry, I will even drop to a 15 min chart to monitor how it gets going. I have a win rate that is consistently 70-80%, has been for ages. But the consistency in actual profit does not come from a high win rate, it comes from a rigid risk/money management.
For example, several studies on trading have been carried out using just a coin flip for entries, and these have shown that such a method can still be profitable provided the risk/reward is strictly managed. I have never tried such an approach but I can believe that it is possible. The main purpose of my TA set-up is to improve the probability level beyond 50/50. That is as much possible on intraday movements as it is on daily/weekly movements.
I do not find anything “exciting” or emotional about day-trading. On the contrary, for me it is a very concrete, mechanical, formalised process, with little room for flair or intuition unless one is just gambling on the markets.
There is no place for traditional fundamentals in day-trading except for an overall backcloth assessment of market conditions. I do not include news trading as “fundamentals”. I use the daily calendar only to watch what is on the horizon because certain events will impact market movements beforehand and that needs to be taken into account in day trading.
There are day traders and there are long-term traders. One is not superior over the other. They are different approaches based on different principles by people with different personalities. They both have their pros and their cons. But they both need similar qualities of experience, patience and discipline.
Everyone knows there are many gamblers and cowboy traders and I would agree that most of these probably trade intraday in (too) large position sizes and off-the-cuff rather than with a strict ruled-based methodology. I am excluding this category in my comments and am only referring to day traders who trade with a professional approach to their business.
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This is all good comment and I think you’re successful enough you don’t need me to try to convince you you’re doing anything wrong - you’re not.
I speak just to new traders who come to trading with no experience but still manage to carry in with them a barrow-load of prejudices.
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I would certainly agree with that but I think very often newcomers do not have enough capital to trade longer term charts. It seems to me from what I have seen here on BP that people are looking at 10-20 pip SL’s? That is not going to work on daily charts, I think?
So it is perhaps a bit of a Catch 22 situation.
For that reason, I think it is important for those who are kind of capital-limited to day-trading to learn to do it properly…because otherwise they are quickly going to join the 75% failure club!
By the way, just earned my 200 ticks on an SP500 daytrade while writing this post! In- out, done for the day!
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You’re right they’re under-capitalised but the reality they should draw from that is they should come back when they’re adequately funded. Day-trading with $200 is like trying to compete on a bicycle with Lewis Hamilton - shorter and shorter races still won’t beat the Mercedes.
A very very few will of course survive somehow but they must have been either lucky in a quick big win or they brought a consistently profitable strategy into the game with them and built up their account using it.
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I was thinking about day trading…but I wasn’t sure. I’m basically looking for set ups on W1, then go to D1 to watch for entries and SLs.
It’s hard for me to imagine day trading.
Sometimes, set ups can take a long time for me. So, I was thinking about day trading on D1.
After reading your post, I kinda feel like it’s worth a shot, perhaps.
Now you’ve got me really worried!! 
I don’t think it is easy to day trade solely off the daily chart, But I think it is very useful to watch the situation from the weekly/daily setup and decide what you are looking for intraday. And then take your entry from the 4H or 1H charts.
By way of example, here is a bare chart (cleared of my infrastructure stuff) from a testing acc, which shows how I traded today.
First look at the weekly box on the left. The SP500 was in a range all week but the Friday close of the weekly candle showed a good pin bar portending further gains for this week.
Then drop to the daily chart in the middle. The Friday close was very positive on the day and also suggested we would see further gains this week.
But these two alone do not help decide entry levels. And with day trading, timing and precision in selecting price levels are critical.
So we drop to the hourly chart on the right. Here you can see that we opened slightly higher in the Far East but drifted off during the day. This was anticipated because Monday markets often tend to pull back to the Friday close. You can see a kind of minor down channel tracking this drift off. And then we get the candle starting in early NY market breaking up from this channel. This matched my expectations for a upside move today and I bought it.
My caveat was that my 4-hour and daily charts are technically still in negative territory according to my TA model. So I aimed for a set tick value rather than let it run as there could easily be a pull back later.
So that is just an example. I am not sure how well this would work on currencies as I rarely trade them but I am sure the same principle of creating a daytrade expectation from a longer term chart assessment would function the same.
Ultimately, what it means is if your intraday chart setup gives a signal in the anticipated direction then you are in the trade. If it doesn’t materialise and the market goes the other way then you simply miss a trade for the day.
I could mention that I use an identical TA infrastructure on all TF charts. It is an adaption from the Guppy MMA method, although honed considerably into something else, but with the same principles built in it.
Each chart has two MA bands, the fast band reflects the chart’s own timeframe and the slow band reflects a proxy for the same detail from the next TF up. I.e. the 15m chart reflects both 15m/1H, the 1H chart reflects both the 1H/4H, the 4H chart reflects the 4H/Daily (although not actually daily, but good enough), and the Daily chart reflects the Daily/Weekly.
Might sound complicated but it is actually ultra-simple. I believe chart structure should be minimal and just tell you what you need to know, no less, no more.
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Basically, the two charts’ direction should match, right? Bearish on D1 and bearish on H4?
That makes sense. The only thing that makes me reluctant is more market noise.
Do you ever worry about market noise on faster time frames?
Well no, not quite…well not always, anyway! 
It is not whether they match or not, it is knowing whether they match or not that determines what type of trade to look for!
If you always only trade when the different TFs are in synch then it will work while the main trend is in force but will run into trouble once the main trend starts consolidating and exhausting itself.
There are always also good trades to be had on pullbacks, but one needs to know the nature of the beast in order to frame the trade. For example, you might recognise on the daily chart that the trend is looking stretched and therefore decide to look for a reversal trade on the lower TFs. But you would recognise the risk of a backlash and select a modest target - and you wouldn’t hang on to it if it falls short of your target and rebounds because you know that the rebound is back in the direction of the main trend!
Fun, eh!
PS, But I don’t want to get into the detail here because this is someone else’s thread…
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Yeah, that’s my point. I’m ok with that on W1/D1 trades. But D1/H4 kinda scares me. Haha
When I base my SL on D1, and trade the swing, if my entry was good, I got in before the volatility starts again. Days or even weeks before.
@coolBuTcute.01 how do you deal with market noise at faster TFs?
Yes indeed, but that is not day trading (the subject of this thread). It is a different form of trading with its own pros and cons, such as cost of carry, weekend exposure risk, etc. Nothing wrong with that kind of trading at all, except that it doesn’t satisfy the appetites of enthusiastic newcomers!
And I really think that people are wired differently and some people simply don’t feel comfortable with constant open exposure over a range of instruments. I am certainly one of them. Curious really, for example, I don’t even think about my holdings in various funds on a daily basis at all, but I do not like open trade positions on a weekend or even during the week. Whatever I have open is always in the front of my mind and that can be very tiring for me. But I know others happily carry open positions for very long periods.
Also, it depends what one is interested in. Some people like to look broadly over many instruments, I only ever focus deeply on one at any time. Some people like to see how positions gradually unfold over time, whereas I like the intraday intensity of rapidly changing circumstances.
The best description of day trading I have come across is a comparison with a day’s fishing trip on a local river. First, you decide whether the general conditions of weather, time, etc are favourable enough to even bother going. You select the most appropriate equipment to suit what your expectations are. Then you walk the river and consider the currents ,depth, turns, etc and select the most likely areas to find the fish. Then you bait your hook, cast your line, and wait for the fish to come to you. But you don’t wait all day. You periodically check the bait, move to another location, and so on. And some days you just lose a lot of bait, and then other times you will catch some really nice specimens that make it all worthwhile. The attraction is as much in the planning of the strategy, the tactics, and executing the plan rather than just in the result.
All methods of trading are valid, but they should feel comfortable and be planned according to what you are hoping to achieve.
I understand that. And that is why it is important to know your market and what it is doing both on a longer timescale and in the short term. But only trading them when they match is, in my opinion, too rigid and creates complications in decide which TF one is actually trading, the long or the short!!!
Here is one example of what I am trying to say here. This is Bitcoin. The daily chart is on the left side clearly shows a downtrend. So one could simply sit with a short position and try and guess where the bottom might be, or has already been (if there even is a bottom with BTC!).
The chart on the right is the hourly chart and has been showing a contradictory upwards move for a few days now. But look at the erratic price action on the hourly chart! This is typical of markets in such a contradictory phase. Price action is generally much smoother when the short term is in synch with the long term. But the hourly chart has been tradeable and has offered gains in spite of the current overall negativity of the daily chart.
Recognising the nature of the beast here means intraday trading should look for upward breakouts and quick profits - until your hourly TA set-up turns negative. If, on the other hand, the daily chart was in an upward move and not over-extended, then you would be looking for upward breakouts on the hourly chart and holding them with, perhaps, a trailing stop and no immediate target.
In this kind of analysis, you are clearly only trading the 1-hour (or 4-hour) chart but on a background canvas that has been painted from the longer term chart.
I should add that this is only my personal way of intraday trading (the topic of this thread) and there are many others. So I am certainly not saying “This is how to do it”!
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As a day trader, one should have a solid plan before entering the market. You should have an exit strategy for all of your trades, otherwise, you are just gambling with your money. A trader should also have money management techniques to follow to ensure that all of their trades are positive, so far the ones they’ve made. A day trader must understand these secrets in order to succeed in the world of trading.