Forex Trading Guide

FOREX Day Trader or Long-term Trading – Pros and Cons

Day Trader (short-term trading) Summary:

A long time ago Day-trading was once the exclusive domain of the Floor Traders.

Those guys in floor trading pits yelling at each other. In modern times day-trading is now accessible for all FOREX traders. Inspired in part by large intraday price swings. The instant availability of quotes. Affordable home computers and/or VPS servers.

And competitive commissions and tight spreads. The new wave of day-trading methods and systems. Has attracted thousands of FOREX traders over the years.

One thing is for certain though. It is fun and exciting to be a Day Trader. Opening and closing several trades in just one day. Doing it a few times (days) a week or the full 5 days.

Some FOREX traders get a good adrenaline rush out of it daily trading. However, day trading is a double-edged sword: One that can hurt as well as heal.

To be a successful day trader you will need the discipline of a machine. The instincts, alertness, speed, and reflex of a rabbit. The emotions and calmness of a rock or a piece of wood. The skills and precision of a surgeon.

And be prepared to embody the virtue of patience. A FOREX day trader works more with the emotions. As well as the fundamental analysis.

Day Trader (short-term trading) Explanation:

A highly active trader who holds positions for a very short time. Performing several trades each (or most days) continued on and on.

FOREX day traders are highly skilled, knowledgeable and disciplined people. With the objective of making a career out of frequent buying and selling currency for profits.

It is common for day traders to execute dozens of trades in a single day. All on a daily basis. And often closing all positions at the end of each day. In other words “a quick in, quick out”.

Day trading can oftentimes be costly. This is because the commissions and the bid/ask spread add up over time. Especially if there is a large number of transactions.

Long-term Trader (Position Trading) Summary:

Long-term treaders pursue occasional significant market moves. These market moves have the potential to either unfold quickly or unfold over time.

Long-term FOREX traders are patiently waiting for ideal trade setups to appear. Throughout minor and major trend reversals. In certain sectors, indexes or entire broad markets.

Establishment of these potential setups is obtained from Technical Indicators, Chart Patterns, point and figure charts. Along with fundamental economic news events and market forecasts.

When market moves begin showing sign of development. The hourly and intraday charts are carefully examined to find the optimum entry points.

Long-term trading(Position Trading) Explanation:

Long-term FOREX traders, unlike most traders and trading styles. Do their business by opening a long-term buy and hold approach. In currency trading, “long-term” refers to holding market orders until the delivery date is close. Usually for several months or longer.

Basically, a long-term trade strategy is to enter the markets only during times of key reversal probability. With the goal of catching large moves as they gradually or quickly unfold.

Long-term FOREX traders prefer a gradual, buy and hold trading approach. When ideal trade conditions exist for the high-odds success of making profits.