How to manage Intraday Positions in Forex Trading

Most of us love the lure of intraday trading, also referred to as Day Trading by many. It is like buying and selling stocks on the same trading day before the Forex market closes. You enter into a position in the morning and take home the profits by the end of the day using the many online trading platforms available.

B2B Trading Platforms such as Fazzaco provide traders with expert financial information to find business partners.

There are numerous currency pairs in existence in the Forex market. Whereas intraday trading is standard in the Forex market, you need to know the best strategies to adopt while trading.

Forex Intraday Trading

Forex intraday trading is a trading system that consists of opening and closing trades on the same day. This type of trading is popular in the forex business. As a forex trader, you must know how to take advantage of the market movements during the day session.

Day traders prefer liquid markets such as the Forex currency. A prerequisite for success in intraday trading or any other type of trading, for that matter, has sufficient market knowledge.

Those new to trading may ask themselves whether forex is suitable for day trading. Many new traders start day trading in forex because of its liquidity.

If you are interested in learning how to trade in forex, you can apply all the information you know in this forex intraday trading article.

Formula For Success

There is no standard formula for success as a Forex trader. Adequate market knowledge and a trading plan are essential but do not necessarily guarantee success.

Risk increases when market prices fluctuate sharply throughout the day.

Commissions and fees for keeping positions open overnight, commonly referred to as Swaps, do not apply to intraday trading. Swaps amount to a fee payable but, in some cases, can be positive, and the trader may receive compensation.

In applying intraday trading strategies, the trader avoids exposure to the risks associated with substantial price fluctuations or price gapping overnight.

Intraday trading usually results in opening multiple trades and holding these for short periods to make small profits. Forex day trading positions account for an integral part of the daily trade volume, providing liquidity to the market.

Intraday Trading Tools

Before starting forex day trading, you must access the right forex day trading tools. You may ask, what platform is best for Forex day trading? What is the best Forex day trading software? 

Trading platforms offer professional traders a range of exclusive benefits such as advanced charting capabilities and automated trading.

Intraday trading invariably carries risks. Without prior training and a vast understanding of the markets, you shouldn’t start it. A trading plan should include detailed risk management rules so that the trader scans the markets for opportunities.

Leveraging

Certain practices can result in a complete loss of capital in the high leverage game of retail forex intraday trading.

Day traders should avoid five potentially devastating mistakes with knowledge, discipline, and alternative approaches.

Averaging Down 

Averaging down in the forex market can lead to several problems. The main problem is losing a position. You not only potentially sacrifice money but also time. You could invest your time and money to be in a better place. Otherwise, a more significant return on your remaining capital is needed to retrieve any lost wealth from the initial losing trade.

Pre-positioning For News

Traders know events that will move the market, yet they are unsure about the direction in advance. Therefore, a trader may even be pretty confident that a news announcement will impact markets. However, traders cannot predict how the market will react to this expected news. Other factors such as additional statements, figures, or indicators provided by news announcements can also make market movements extremely illogical.

Trades After News Hits

A news headline can jolt the markets at any time, causing aggressive movements. At the same time, it seems easy money to be reactionary if you do it in an untested way, and without a solid trading plan, it can be just as devastating as trading before the news comes out.

Risking Capital

The practice of taking on excessive risk does not guarantee unreasonable returns. Most traders who risk large amounts of capital lose it in the long run. A common rule is that a trader should risk no more than 1 percent of the money on any single trade.

Unrealistic Expectations

Unrealistic expectations come from many sources and often result in all of the above problems. We have our trading expectations, but we cannot impose our desires on the market. Traders must accept that the market can be choppy, volatile, and trending in various cycles. One of the best ways to avoid unrealistic expectations is to formulate a trading plan. If it yields steady results, you can stick it. With forex leverage, even a small gain can become substantial. As capital grows over time, you can increase the size of your position to reap higher returns or new strategies implemented.