Is It Possible to Make Money on Forex Day Trading?
Different approaches to trading require different amounts of capital to be held in a trading account in case the market is not going in, say, the "right" direction at the moment. Newcomers often lose their money because of this factor, as they try to make money quickly, and therefore often open high-volume positions, which they do not have sufficient reserves to maintain in the future.
Of course, even seasoned professionals cannot avoid occasional losses, but they are already so experienced that, thanks to their skill and discipline, they can erase almost every loss in a "short" time and replace it with a profit. You also want to be one of them, for example, then don't leave and read on carefully.
Intraday trading - profit maximization and loss minimization
Why choose intraday trading?
Long-term statistics show that more than 80% of forex traders prefer intraday, ie short-term trading over long-term. This means that most stores that are open on a particular day are also closed on that day. And it is in this that intraday trading is so special because it gives the opportunity to trade even to those who do not have enough capital needed to maintain long-term positions.
Unfortunately, intraday trading is sometimes said to be one of the riskiest ways of trading. However, we dare to disagree with this view. Every business method can become a high risk if we do not approach it with caution. After all, it is an approach that diametrically divides traders into those who claim that this or that method is the riskiest, and then into those who see it completely differently.
Choosing the right business method
- probably one of the most popular trading approaches, in which the trade lasts a maximum of a few minutes.
- the advantage of this method is time and the disadvantage, on the other hand, is the relatively high volumes that need to be traded in order for any profit to make sense. With this fact, of course, the risk of possible higher losses increases, and therefore this method should be chosen mainly by more advanced traders.
Shorting (speculation on a drop in price)
-a great trading method, which is usually used by traders when markets have been growing for a "long time" and now expect the price to start falling.
-the advantage is the possibility to gain from the decline in value, on the contrary, the disadvantage is that the trader may lose hundreds of percent of the position (for forex little seen effect, occurs more with precious metals, commodities, stocks, etc.)
Here, the moments are used when the market has behaved according to certain rules that the trader has chosen before entering.
Example: Opening a trading position when the price reaches a certain S / R level.
It does not matter whether the trader prefers one of the above methods or another. What is extremely important in this case is the knowledge of situations in which it is possible and appropriate to use this or that method and, conversely, when it is better to reach for another. This means that if someone uses a certain method on a certain instrument, for which he knows that in the long run, he achieves positive results only in long trend trades, then it is nonsense to try to use it in short trades, for example. Only with such an approach can losses be minimized and profits maximized over time.
What mistakes to avoid in Intraday Trading
Beware of rollovers - opening and closing trading positions at times that are close to rollovers may not be completely wise. Rollover is often associated with the spread of spreads, which can cut a lot of potential profits on both sides, or also send a trading position to Stop-Loss.
Do not risk more than a specified number of percentages - risking more than 5% of business capital is considered a gamble (rather a value of around 1% is recommended) and with such practices it is really difficult to expect minimal losses.
Always have a business plan - without a business plan, trading is a journey into the unknown, which in most cases has a bad ending. A business plan is the foundation that should show the direction even in the most difficult moments. A good business plan should therefore be able to answer the question "What to do when this or that happens?" In each situation.
Don't just rely on business news - business news can be a great help at times, but relying on it like a bible sometimes doesn't pay off. As they say, everything in moderation.
If you are interested in trying trading on your own with first-class trading conditions and a professional forex broker, then do not hesitate to try our demo account, which can be set up on our website completely free of charge and without risk here: www.purple-trading.com/en
We wish many profitable deals!
Purple Trading team
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