What is forex day trading?
Forex day trading is a short-term strategy that is particularly popular among retail forex traders. It can be a quick way to see returns on an investment. Forex day trading is best suited to traders who have enough time to analyse the markets and monitor their trading charts​ throughout the day. Read our in-depth guide to day trading.To get more news about forex day trading, you can visit wikifx.com official website.

Forex day trading involves reacting to short-term fluctuations in the prices of currency pairs and therefore, this requires control, focus, discipline and the ability to stick to a trading strategy. Our trading platform offers a range of trading tools, such as technical indicators and drawing tools, in order to help traders devise potential entry and exit points for their trades.

Forex day trading strategies
It is important for traders to familiarise themselves with different trading strategies when it comes to the foreign exchange market. Typical forex trading strategies will involve some form of technical analysis, fundamental analysis, or a combination of the two. Forex day traders will use this analysis to help decide when to buy and sell currency pairs.

It can be the case that more than one strategy is needed for forex day trading. As market conditions vary on a day-to-day basis, traders should be prepared to adapt their strategy, such as during times of high market liquidity.

Forex news trading
Traders will want to stay up-to-date on the latest trading news releases in the short-term. Knowing what is going on in the markets can help traders prepare for potential trading decisions in advance, and to plan their trading goals and strategies at the start of the day. Central bank announcements, interest-rate changes and other data releases are all important economic indicators that can impact currency prices, so it is important to keep track of major economic announcements and news events as a day trader.

Trend trading
Another popular way traders approach forex day trading is through trend trading. This involves looking at longer-term charts to identify a trend. Once the overall trend is established, traders would look at a chart with a smaller timeframe for trends moving in the same direction. Our advanced trading platform has a number of indicators and drawing tools can be used to help traders determine trends. Learn how to identify and draw trendlines​ on our price charts.

Momentum trading
Momentum trading​ is another popular approach to forex day trading. This approach looks for strong price movements paired with a high volume of trading in the direction of the move. Momentum trading involves being able to wait for the best opportunity to open a position. Traders could consider using our specialised momentum indicator to determine momentum within the forex market.

Identifying breakouts
Breakout trading is a common strategy for forex day trading, which also involves waiting for big market moves. These big moves can be caused by things like changes in a country’s economic data. They can happen unexpectedly or after expected economic announcements. With breakout trading, a trader would wait for prices to break through significant price support and resistance levels​, indicating the start of a trend. The trader would then open a position in the direction that they expect prices to move. Identifying and trading forex breakouts is an efficient strategy for those who keep up-to-date with economic and political news.
Indicators for day trading forex
Understanding chart types and how to use technical indicators​ is fundamental for any forex day trading strategy. Day trading takes place over a short time period, so it is necessary to make quick decisions. Traders should be able to read charts efficiently and accurately so that this does not slow down their trading. The following technical indicators can be used on forex day trading charts:
Forex day trading rules
Forex day traders should know their order types well. This applies to both getting in and out of the markets. Orders are important as they can help traders determine when to open a trade and maximise potential profit, as well as close their trades to reduce losses. If a trader doesn’t know their order types well, this can slow down their trading, and ultimately cost them money. Read more about our execution and order types, including stop-losses, market orders and limit orders.

Traders should research a broker properly before trading with them as it is important to be aware of brokers who are not fully authorised and regulated by the country’s regulatory authority. All forex brokers are subject to certain regulation. In the UK, traders should check that their chosen broker is fully registered and authorised by the Financial Conduct Authority (FCA).