Day trading Tips!

Day Trading Forex Effectively

What to Look at First when Day Trading Forex

Take a look at the daily charts and identify the present trend (what’s been going on the last two weeks) in the key USD pairs. Group them as follows:

Deciding What to Trade

Focus on the two currency pairs with the clearest present trends. It’s a plus when all the pairs in a group are indicating the same present trend.

Enter Trades When Volume is High

The charts and technical analysis work best when the currency pair is experiencing high volume, which means when the country’s banks are open. Enter your trades in the…
- European pairs during the European trading hours
- AUDUSD, NZDUSD and USDJPY during the Asian trading hours.
- USDCAD during the US trading hours.

Be Aware of Key Scheduled News Releases

- Key economic news releases cause price spikes that have little or nothing to do with the charts and technical analysis.
- Don’t put on a trade less than an hour prior to any key news release if either currency in your pair is involved in the release.
- Expect to close any open trade at least 5 minutes before the news release. 

Make Sure of Your Profit Target

- Before entering a trade, make a determination of whether or not your profit target is achievable today (assuming it is a day trade).
- You can do a quick check by comparing the current daily candle’s length to the last 10 days candles.
- If the current candle would need to be a lot longer than recent candles to reach your profit target, it might be a good idea to rethink the trade.

 Is Your Stop Loss Protecting Your Trade?

- Your stop loss is critical because it determines the point at which you have no further chance of profiting from your trade.
- Never increase your stop loss – never. At the point you are increasing your stop loss things are NOT going well – don’t compound the problem.
- Be careful moving your stop loss prematurely to eliminate risk or lock in a profit. Make sure you are giving your trade a fair chance to succeed.
- Never close your trade because you are bored. Remember how boring you day job is!

By Jimmy Young