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3 keys to survive in Forex Day Trading

3 keys to survive in Forex Day Trading

Day trading has always been one of its most famous and widely misunderstood speculation, not only in the market forex (foreign exchange), but also in stock and futures trading. Skills and experience is especially important for forex traders today since the market movers (the "smart money") is famous for manipulating short term price action deliberately slaughtered fresh prey.

Unfortunately, beginner to online forex trading seems to have a tendency to believe that day trading is somehow easier, safer and more appropriate for those with a little experience-and very little balance to match. This is not.

Profitable day trading in the foreign exchange market is indeed possible, even in such a market environment is highly manipulated, but it's just not a suitable approach for each trader for various reasons, psychological and practical. If you choose to try it, then make sure you choose it for the right reasons.

I've come up with five key to survival is to describe what really needed to be a full day of currency traders.

1. watch the price action in real-time, every day.

I know this is not what newbie wanted to hear, but it is the truth. If you want to be able to learn the text book chart formations and can directly apply it, then at least start with daily or hourly charts first. Reacting to price action on the short-term charts used for day trading (typically 15 minutes, 5 minutes, or below) requires an element of skill and experience in addition to an understanding of the principles of action of the base price.

If you decide to learn day trading (or even a scalping) time frame, paying close attention to the speed of price movements and price area around a round number (x. xx00 price levels, or xxx. 00 in the case of a couple of Yen.)

2. learn, understand and internalize the price action really is.

The forex market is driven by orders, whether they come from corporate or speculators. Imagine that the current price is a bus that will travel the North well (long) or South (short) after you have gone up (entering the trade.) Every 10 pip on this "way", there are traffic lights. Every 100 pip (large round numbers), there is a large intersection.

For the purpose of this strange metaphor (but hopefully illustration), let's assume that you do not have access to the schedule and you may visit this strange foreign City (newcomers to forex) so you do not even ask the driver which way the buses will head (you can not ask for market movers what they want to do)-all you know is that you want to travel one way but there are almost 50/50 (and I emphasize almost 50/50karena not really) the opportunity that the bus It may take you in the opposite direction than you want.

The point is that, once you have jumped onto the bus (incorporated trades), head towards the direction of where you need to remember that there are 10 pips on every traffic light (against orders) which may or may not turn out to be red (and consequently stop the bus.) If it turns red, the bus may have reached the end of the route (reversal of) or could proceed in that direction came when the lights turned green (continued.)

As mentioned earlier, the traffic light we have to pay attention the most is the intersection of the (big "double zero" round number price level.) The bus route is less likely to end in some random little residential street in between than in one of these-is less likely but not impossible.

Remember, the driver will not tell us where he was headed until we trade probabilities, not certainties. Our job as a trader of the day is to learn, practice, and internalize the ways to profit from a higher probability.

3. do not ever assume that advice is meant for other (long-term) forms of trade are valid for day trading or scalping.

A lot of advice from books and internet forums are very good for the swing trader and trader's position, especially in the framework of time per hour and higher. Very little of it, as far as I've seen, very suitable for short term day traders and brokers.

One example that comes to mind is a strategy commonly used to enter the trade after "confirmation" break-out. In an hour and higher long-term strategy, waiting until the price has obviously violated the area of support or resistance can be very effective. In the short term the intraday trading style, where the short term support and resistance closer together, probably does not support such an entry. S

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