Many novice traders in particular, like to employ day trading strategies to make money and here we will look at the logic behind them and look at whether you should try this method of currency trading.

Lets look at the background to day trading first and then compare it, to other currency trading methods and see which is most likely to lead you to currency trading success.

The Concept of Forex Day Trading

The idea behind day trading is simple – to trade within a day and look to take small regular profits and keep risk to a minimum. These strategies can also be called scalping and there very popular, especially with novice currency traders. The day trader looks to key off support and resistance levels which occur within the daily range and execute their trading signals with tight stop loss protection, looking to get a quick profit with low risk.

Day Trading and Instant Price Information

In the days before the internet, there were many famous traders who were successful at Forex day trading and scalping and this was in the days before instant price delivery, when only a select few traders had the price before everyone else. They used this time window, to get in and out the market before the majority of traders had even seen the price and there was big money to be made. Today though, we have instant Forex price delivery and everyone can get the price at the click of a mouse and this advantage has now gone.

Day Trading and Volatility

If you look at FX Prices in a daily time frame you will see all volatility is random and when this occurs, you cannot key off valid support and resistance levels, so you can't get the odds on your side and eventually you will lose money.

Random Price Movement

To try and determine with any Forex trading strategy what countless millions of traders, all with different opinions and motivated by the emotions of greed and fear, will do in a few minutes or hours, is an impossible task and one you should avoid.

Trade the Odds in Longer Time Frames for Success

If you want to win with your currency trading system, you need to trade the odds and this means basing your trading strategy on periods of time where you can make money. If you want to make currency trading profits look to be a Forex swing trader who trades time frames of a few days to around a week or a Forex trend follower, who looks to lock into the big long term trends which can last for many weeks or even longer. Not only is the profit potential better, with these strategies you will also spend less time on your trading.

Currency day trading and scalping is popular and traders think that it restricts risk but on the contrary it actually creates risk because longer term the odds are against you and you are likely to lose – so forget day trading strategies as a way to seek trading success and trade the odds in longer term time frames.