How to Trade Forex Intraday?
How to Trade Forex Intraday?
Let's see what kind of trades we can perform in Forex:
Short term: This refers to transactions that are opened and closed in a short period of time. Usually last less than 24 hours open and seeking a few pips profit on each transaction. We call this: intraday or day trading
Medium-term: It consists of trades that last longer than a day, but less than a week.
Long Term: Refers to trades that involve opening a position in the market and keep it open for more than a week, looking to take advantage of longer market trends.
Intraday trades are classified as short-term transactions that take place during a full day of activity in the foreign exchange market. This means that the trader opens and closes positions many times during the day, winning a small number of pips in each position but at the end of the day; the sum of all the pips achieved makes an attractive amount of gain. Another idea is to earn a little on every transaction, but to be consistent over time.
There are two forms of intra-day trading:
1. Breakout: This refers to when the market shows marked breaks and trends. It seeks to enter the breakdown of the latest high or low in search of the average daily range expansion. The shots are normally gaining 15 to 30 pips and Stop Loss is generally the same amount, so a risk-benefit ratio of 1 to 1.
2. Retracements: refers to when the market remains in range or trend but retraces and go in the opposite direction. It seeks to trade in the low buying or selling channel in the top of the channel should be taken into account the session to see the volatility and the average daily range to find the shrinkage when the range is exhausted.
How to do intraday trading?
To run this type of trade is necessary for the trader to choose the right time to take a position in the market, using strategies, indicators and patterns. To perform intra-day trading is recommended that the trader has a lot of market experience, and you may not realize the amount of money being lost because there are few pips in one trade, but if you add up all the pips lost in the day, you may take a big surprise.
For this reason, implementing an intraday strategy, we recommend that you use as essential tools to establish a loss. Which means putting a stop loss order, which should not be more than 5% of capital per transaction (3% preference), although this is set by the trader according to the budget. This means that the trader determines how much money their willing to lose on a trade and not going over this data set to not lose all your money in a bid.
Some recommendations to trade intraday:
Perform trade during the first hours of the day or market session.
Place Stop loss to avoid losses.
Keep your open positions until you see a clear weakening of the market. In the first signs retracements close the position.
Have a maximum daily amount of loss.
Take into account the average daily range to find breaks while still remaining range and seek retracements when the range is exhausted.
Use indicators to continue to trade and master patterns.
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