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2 Easy Strategies in Day Trading: A Beginners’ Guide

Day trading is a popular term in the forex market, where the traders can sell and purchase stock in a day. This trading gets completed within a day before the market closes for the day. The traders, who trade in the day trading, are known as day traders. The traders trade in this market in order to gain small profits. They are also known as specula...

Day trading is a popular term in the forex market, where the traders can sell and purchase stock in a day. This trading gets completed within a day before the market closes for the day. The traders, who trade in the day trading, are known as day traders. The traders trade in this market in order to gain small profits. They are also known as speculators. The speculators earn profits by leveraging big amount of capital with small price movements.

In terms of day trading, it is really tough to trade here without a proper day trading method. In fact, trading without proper trading method can be a dangerous game for you. Hence, two major strategies are discussed in this article (Information courtesy: CornerTrader), that will help you to trade in this market successfully.

1. Moving average Strategy:

MA or Moving average indicators are the indicators that are most popularly used among all the trading platforms. These indicators are so user-friendly that they can benefit the traders who are new to the foreign exchange market. The traders are enabled to set various criteria according to their preference. The moving average cross over strategy is really beneficial for the traders. In order to apply this strategy, three moving average lines are required. As per periods, these moving average lines are calculated. They also help you to know the trend of the price movement. The traders, who apply this strategy, can choose and set three different periods. Among the many, the most popularly chosen periods are 20 periods, 60 periods and 100 periods, as they derive better results. Fast moving average is offered by the shorter time frame whereas the middle time frame displays slow moving average and the longer one is a trend indicator. The time when the short period moving average crosses over the middle period moving average, the signal of buying is indicated. Likewise, when the short period MA moves below the mid period MA, the selling signal is generated.

2. Candlestick strategy:

One of the easiest and the most accessible indicators that can be used easily by the beginner traders is candlesticks. These indicators have different patterns. The time when the real body of a price candle covers or includes the real body of one or more preceding candles, an engulfing pattern is created. In case more candles are engulfed, a powerful signal is indicated. Mainly, two types of engulfing patterns are there - bullish pattern and bearish pattern. The former one indicates the bullish rise head or the bullish market, whereas, the latter one indicates just the opposite.

The bullish engulfing pattern is the signal of larger upward movement in the prices. As a trader, if you see engulfing pattern appear, you have to wait till the next candle appears. Once the next candle appears on the chart, it is the right time to open your position.

Bearish pattern acts as an indicator of bigger decline in the currency prices. The traders should wait during the time when the bearish pattern is taking its form.

It is true that day trading is a very lucrative method of trading, but the traders should know the fact that it is risky as well. So, in order to trade successfully, you have to follow risk management tips, and you should always follow the trading strategies to minimise negative consequences.

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Tuesday, 19 November 2019
 
     
 

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© 2009 - 2019 Forex Forum. All Rights Reserved. Risk Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.