Many traders base their Forex trading strategies on day-trading which entails that all positions are opened and closed within the same day. If you desire to do the same then you will need to undergo serious training in order to ensure success.
Do not follow the herd who think that this type of trading will produce for them instant profits. Forex only allows those traders to prosper who have attained the right levels of education enabling them to develop good trading strategies which they can apply emotionless and with discipline. However, if you are prepared to make the necessary commitments then the rewards are well worth the effort because you can attain a good lifestyle from day-trading Forex.
If that is so, then what is the best route forward you may well ask? You are well-advised to develop your day trading skills by using the following steps:
1. You must first learn how to analyze Forex competently by gaining a good understanding of fundamental and technical analysis. You are also recommended to design your own trading strategy as opposed to trying to purchase one. This is because you will develop a better feel as well as superior skills by doing so. In addition, you need to select a good Forex broker possessing a top class trading platform.
2. Next, you are recommended to write a Forex business plan that precisely details your trading strategy. You should also state the prime objectives that you would like to achieve by day-trading. In addition, you should include your risk analysis. Once you start to trade, you must then record all your trading activities such as your entry and exit values of your trades as well as your profits and losses.
3. You must next use a demo account to fully test your trading strategy. You should attempt to simulate live conditions but without risking your own equity. You will discover that your chosen Forex broker will be very willing to provide you with such a facility. If not, then locate one that will.?
4. Once you have gained confidence using your demo account, you should then progress onto live trading by exposing your equity to small incremental steps of increasing risk. You can achieve this by first using a micro live account (ten cents risked per pip), then a mini ($1 per pip) and finally a standard one ($10 per pip).
5. Your trading strategy must incorporate a good risk and money management strategy in order to provide the maximum protection for your equity. Many experts advise risking a maximum of 2% of your total equity per trade.
6. Day-trading can produce some very nerve-racking situations. Consequently, you must strive at all times to keep your emotions under as much control as possible. You can do this be sticking closely to your trading strategy.
7. You should constantly seek improvements for your strategy. If you do make any adjustments, then you must re-evaluate its performance by calculating its new win-to-loss ratio and expectancy value.