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Forex Education

How To Make The Most Of Day Trading Forex

December 06, 2018
BY Michael Stark

You love being the one who is “in the know”. You thrive on applying your insights and intelligence whenever possible. You have the self-control to sit in front of a terminal for long periods, waiting for the perfect moment to strike. Now let’s hone those skills and help you become a great forex day trader.

To get you started, let’s address some of the most common questions that new day traders have.

Why day trade?

Many forex traders find day trading attractive because it stands comfortably in the middle of both shorter-term trading types like scalping, and longer-term approaches like swing trading.

Day traders need to make use of both fundamental and technical analysis, then need to both keep an eye on longer time frames for context and shorter timeframes for execution. They also need to make significant numbers of trades per day, relying on take profit and stop loss orders to best manage their strategy and risk.

As you can tell, forex day trading is very hands on, which suits some traders excellently.

Which timeframes should I be using?

As previously mentioned, day traders need to stay on top of a multitude of different timeframes in order to get the full context of how the market is moving on that day.

As with all things, the exact timeframes used for contextual understanding and actual execution differ day trader to day trader. Ultimately, it is far more important for you as a new day trader to get comfortable with whatever chart you’re using, rather than to spend hours worrying about which one is right for you.

Note also that with day trading, major price patterns will appear both on shorter and longer timeframes, limiting the importance of being on exactly the right chart at the right time.

To find out whether day trading might be right for you, take the quiz!



Find out your forex strategy


What leverage should I use?

Leverage can be a powerful tool to maximize the potential profitability of your trades. However, it is also a double edged sword and can just as easily result in significant losses if used incorrectly or if a trade does not go your way.

While scalpers often have to make use of high leverage to get the most out of small price movements, day traders look for somewhat larger movements when setting their take profit and stop loss orders. This means that leverage can be proportionally lower than when scalping.

As with timeframes, the best way to discover what the best leverage ratio is for you is to experiment. Open an Exness Demo account today for unlimited risk-free testing before you hit the markets for real.

What’s the best indicator for me to use?

Day traders make use of both fundamental analysis, including news and reports, as well as technical analysis methods, including indicators.

The MetaTrader 4 platform comes bundled with 30 trading indicators. MetaTrader 5 comes with an expanded selection of 38 indicators. Furthermore, on both platforms, traders can access more indicators from the MQL4 and MQL5 communities respectively.

Many experienced traders will swear by one or two specific indicators, however, the fact of the matter is that there is no silver bullet when it comes to choosing which ones are best for you. All indicators are just manipulations of volume and price data, and are therefore always open to errors.

Picking the right indicator for you is really a matter of experience and experimentation. Start with some of the most popular ones, MACD or Bollinger Bands perhaps, and then go from there.

Is there a specific time of day I should trade?

Day trading is ideally suited for those with enough time to devote to watching the markets on a daily basis.

Furthermore, with 24/5 trading available on most currency pairs, and 24/7 now available for cryptocurrencies, there are very few limits as to when you can trade. This can often lead to day traders spending too long each day at their monitor.

While this is sometimes required, it can also be harmful. As a trader you need to find a time when you can get into the right mindset to trade to your fullest potential.

So you’ve got the basics nailed down. Now for the next steps. Download our ebook to dive deeper in the world of day trading, then hit the markets with Exness and make your first trades as a day trader!

Interested in exploring other trading strategies? Check out our guide to being a scalper, and our guide to being a swing trader. Alternatively, take our quiz to find out which style of trading you are best suited to.



This article is a marketing communication and does not constitute investment advice or research. Its content represents the general views of our experts and does not consider individual readers’ personal circumstances, investment experience, or current financial situation. This article is not prepared in accordance with legal requirements promoting independent investment research, and Exness is not subject to any prohibition on dealing before the release of the article. Readers should consider the possibility that they may incur losses. Therefore, Exness is not liable for any losses incurred due to the use of its articles. Please note that past performance of an asset is not a reliable indicator of future results.

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