Many new forex traders tend to go with the day trading forex strategy as they need a smaller amount of capital to begin trading forex. Currency exchange is 24 hours a working day that offer plenty of potential profits due to the leveraged given by forex brokerage companies.
So, forex day trading can be highly volatile, and new traders can make high profits by making trades anytime.
Are you want to know day trading forex is profitable? Read the article until the end.
What is day trading?
Forex day trading is the top-trending strategy where traders buy and sell financial instruments like currency within the time frame of a single day’s trading. A day trader aims to earn potential profits from frequent small currency movements.
Day trading is a short-term trading strategy in which you open a trade In a day and close it out when the day gets over. It is the best match for those with enough quality time to monitor, analyze, and execute the trade.
If you start, open a demo account with ecn brokers to test your skill.
Is day trading forex profitable?
Day trading strategies have many potential features that monitor profitability in several ways. It is usually the top-ranked profitable forex strategy due to its risk/reward ratios and wins rates.
The risk/reward ratio indicates how much capital is being risked to get a certain profit. For instance, If a day, traders lose 10 pips on losing trades but get 15 on winning trades. Then they are making more on the winners than losing on losers.
If you only win 50% of your trade, it will be .ore profitable. Therefore, it is suggested to make more on winning trades. It is a well strategic feature for which many traders strive.
A higher win rate for you comes with high flexibility with your risk/reward ratio. Moreover, a high risk/reward indicates that your win rate can be down, and you’ll still make potential profits.
Day trader’s win rates express the number of trades they win put of the total given. Let’s suppose a trader will 60 out of 100 trades. His win rate would be 60%. Moreover, achieving a win rate of more than 50% is the best mark for many day traders, while 55% is practical.
Understand the following aspects if you want to choose, day trading
- You have to keep yourself up-to-date on the fundamental analysis (latest economic events and news) to make profitable trading decisions at the start of the day.
- If you have a full-time job, we will recommend you not to choose day trading as you need to keep an eye over the currency chart all time.
- There are many types of day trading like trend trading, counterpart trading, range trading, and breakout trading. Opt for the one that suits your skills and strategic plan.
Day trading is profitable if you dedicate your full time to analyzing and monitoring currency charts. Profitable currency fluctuations can occur at any time of the day. So stay focused on earning potential profits.