The forex market keeps fluctuating as a result of market developments as well as ups and downs around the globe. That’s exactly why traders must create a strategy when it comes to investing in forex and other assets. However, while some traders prefer the long term Intraday Trading Strategies, others rely on short term trading techniques such as the intraday trading. In this article, learn how to intraday trade in forex.
What is Intraday trading?
Before proceeding further, let us first understand what intraday trading is all about. Simply put, intraday trading is about opening and closing trades in a single or same day. As far as forex intraday trading is concerned, traders have the option of trying out different techniques such as scalping, trend trading, swing trading as well as trading on the basis of the latest market news or development.
For instance, if you have purchase EUR/USD at the existing exchange rate when the market opens, then you must sell the pair before the market closes. While trading online, investors must specify that it is an intraday transaction at the time of order placing. As already stated above traders have the option of choosing from among different style of intraday trading. For example, some investors prefer the short-term strategy and thus exit from their current position, after they have reached the minimum or desired level of profits. These traders basically stick to the transaction volume in order to earn substantial profits. As a result, they place buy and selling orders multiple times in a day and thus exit within just a couple of minutes of entering a position.
On the other hand, other set of traders prefer trend trading as part of their intraday trading strategy. These traders show much patience relatively and hence make only a couple or few transactions in a day. A good number of traders focus on event based intraday trading. They trade only when some prominent event takes place or when the forexn market goes up/down, owing to specific events.
Why Intraday Trade?
Now the big question here is why do some traders intra-trade? Well, the answer is pretty simple and straightforward. Intraday forex trading charges are not very high. Besides, many of these investors are comfortable using this technique. Apart from this, intraday trading offers higher margins. This means if you have 1000 dollars in your account, then you can indulge in transactions that are much higher than this amount i.e. in multiple of $1000. The ratio may differ in accordance with the broker you are dealing with. Another reason why some traders prefer Intraday Trading is because they don’t believe in carrying their trade positions into the next day. This is because they fear that the prices may be severely affected owing to an upcoming or existing event.
Final Words
So, we come back to our original question i.e. how to intraday in forex? The answer to this one lies with the individual trader. If you are a beginner and do not have sufficient knowledge around trading, then intraday forex trading could help you in practising and gaining deep knowledge around how the forex market really works.
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