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Forex Trading Tutorial: How to Start Day Trading

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The foreign exchange market is the largest financial market in the whole world, in terms of trading as well as liquidity. Day trading is one of the most popular and the most preferred ways of trading in the forex market. Day trading is a type of trading, in which buying and selling of assets take place within one trading day. Day trading occurs in various different market places. People from all over the world take part and trade in this market.

If you are new to the forex market, you may ask what is forex online trading? Well, Forex is a mammoth of a market with gigantic average, daily investment being in trillions of dollars. Traders who have a profound knowledge about the market and have good funding perform better by applying some short term strategies. Day trading traders use the benefits of the leverage to strengthen their funding. Highly liquid assets like stock and currencies can be capitalised through short term trading on small price movements. Day trade provides both liquidity and support to the market.

What characteristics a day trader needs?

When you are deciding to trade in the forex market and you choose to be a day trader, you need to answer one question. The question is whether you want to trade for living or as a hobby. If you want to trade for living, it means you are ready to give your undivided attention in this trading. In this case, you need the following characteristics to be a day trader.

Knowledge: For those who don’t want to gamble high or check their luck, gaining information about the market is a very crucial matter. Any trader, who wants to earn his or her bread through trading, must have fundamental knowledge about the market and its operation.

Capital to support the trade: When you are planning to jump into day trading, you need to know that you will not make money instantly. Short term traders use only that capital to trade which they can afford to risk. Thus, as a day trader, you need to maintain sufficient amount of capital.
Apart from this, a day trader needs to have the right approach, ability to take risk and trading skills. If you use refined strategies, you can earn consistent profits without occurring major loss. Just like any form of trading, a day trader in forex needs to maintain discipline.

Two types of professional traders

Day traders can be of two types - traders who trade alone and traders who work for larger institution. Most of the traders, who want to earn living from trading alone, work for institutions. Traders who work with institutions, have access to direct line dealing desk, huge capital and leverage, software for analysis and many other benefits. Individual traders might help in managing money of other people with few having access to the dealing desk.

Strategies for day trading
There are many strategies that will help you trade better in short time frame.

Scalping is a very popular strategy used by the day traders. The assets like currencies are sold immediately, after they start showing signs of profit. The price point of the strategy refers to the time when the asset becomes profitable.


The momentum strategy involves trading on news releases. It also considers the strong trends that are supported by the huge volume. Traders, who swear by this strategy, buy assets based on the news releases. They continue over the trend till a reversal is indicated.

Daily pivots

The strategy involves earnings from volatility in the market that occurs daily. The assets are bought at lower price points of the day and sold at higher rates. Traders sell when the signs of reversals occur.


Fading is a strategy that involves shorting of assets, when a rapid upward movement in price occurs. The strategy is based on three assumptions – a) they are overbought b) early traders are ready to take profit and c) existing buyers are scared.

Although a little risky, day trade can be beneficial if traders practice caution and follow certain strategies. If knowledge and skill is applied properly, day trade can prove to be a genie.


kolli's picture

I prefer to trade short term options, sometimes it's too risky, but as soon as you receive the first payments, you forget about the worries. And besides, you don't have to limit yourself to only one strategy, can always try something new for yourself.

Vizory's picture

I trade when I feel like it, I trade both shorterm as well as regular, almost no difference, but short term look more like russian roulette.

Prime's picture

Scalping is quite an interesting strategy, but as practice has shown, it's quite risky.