5 Day Trading Strategies for Beginners

Updated By: Joe


Are you new to forex trading? Traders who decided to start forex in Malaysia and other Asian countries often begin with day trading before heading into longer-term positions.

So, what’s the magic with day trading, and what are the best strategies beginners can use?


The Benefits of Day Trading


In general, day trading is a short-term strategy that concludes all trades by the end of each day. It’s often considered the quickest way to make a return on forex, which explains why so many traders are attracted to day trading.

Day trading also often comes in smaller volumes, which is more friendly for new traders. And because you need to stay alert with any changes, it also allows you to grow as a trader swiftly.


Learning When to Sell


The key point in becoming a successful day trader is knowing when to sell. In other words, you need to look for forex signals that tell you:


  • What currency pair to trade
  • Entry, stop-loss, and profit prices
  • If it’s time to buy or sell
  • How much you might make or lose on a trade


You can either compile your own signals or use one of the many trade signal providers available. Available options range from free newsletters to paid services. Therefore, you’ll surely find something that provides you with the necessary insight for day trading.


Scalping


If you’re confident in your knowledge, give scalping a shot. The strategy focuses on repeating small wins so you can build up a profit, instead of hoping to hit the jackpot with one trade.

Scalping calls for swift, accurate decision-making. You must sell the moment you notice a price drop to avoid the loss or buy once you notice an increasing trend.


Breakout Trading


Breakout is one of the more challenging day trading strategies you’ll see others use. You buy one the price raises over the former resistance price, as it has broken out of a stagnance.

As most prices will retreat after hitting the resistance level until the next time something pushes it over, knowing when to sell is critical for a successful breakout trade.


Momentum Trading


Riding the wave is the best description of momentum trading. With this strategy, you aim to buy low at the beginning of an uprising momentum and sell high when the price reaches the peak.

Also, you’ll set a stop-loss point for momentum trading at the earliest price decrease to avoid loss.


Pullback Trading


As the name indicates, a pullback strategy requires you to step back and monitor your target currency pair.

Forex signals are a great tool for pullback traders as it allows you to analyze the overall performance of a currency. But the core logic is the same — buy low, sell high, so you can profit.


Reversal Trading


A reversal is one a price trend changes its direction. So, a rising currency’s reversal is when the price begins to drop, and vice versa. Reversal trading is great for those who can’t monitor market change all day long as scalpers do.

Basically, you’re only looking for turning points to help you make the buying or selling decisions. This method allows you to sell at the highest price possible and buy at the lowest you can, all the while preventing significant losses from price drops.


Get Started with Forex Trading


We hope these day trading strategies will help get you started with forex trading! Always remember research is half of the success in the forex market. Then, just stay calm and don’t let greed get the better of you.


Source: https://smartlagos.org/

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