Forex Trading Advice For Day Traders

Day trading on the forex market is not for the faint-hearted. You will need to carefully plan your moves and be disciplined. You will need to learn the technical and fundamental drivers of currency trading in order to successfully compete in the forex market. You will also need to start with a sufficient amount of capital. The amount varies from individual to individual, but it is wise to start with at least a few hundred dollars. You can then move on to a larger account size if you see a better opportunity.

A long position is when a trader buys a currency hoping that it will appreciate in value. He or she will then sell it back in the market at a higher price than what he or she paid. This is also known as a “short position.” Once the trade is closed, the trader would have made a profit. For example, a trader might buy one Euro for USD 1.1918, expecting it to appreciate against the Japanese yen. Then, he or she would sell it back at a higher price when the Euro has appreciated in value.

Traders can also use technical analysis indicators to help identify trends and price movements. These indicators may include long-term moving averages and short-term moving averages. They also watch for crossovers to signal a potential reversal. In the example below, a four-hour candlestick chart of EUR/JPY shows an upward trend. Indicators include the 10-day moving average in red and the ADX indicator in a small indicator box.

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