Forex day trading is a great way to make money and build your saving account. You should learn to day trade forex. But before you embark on your journey of currency trading, a few facts should be very clear. These facts should be the foundation of any forex trading system that you will use daily for day trading.
The first most important thing that you should understand and make very clear is that forex is not a get rich quick scheme. Skilled currency traders can and in fact do make good money in forex trading. However like any other business or career, success just doesnt happen overnight or in a few weeks. You should use this great formula for success: Patience+Practice+Persistence=Profits.
You should know that there is no substitute for hard work and diligence. Practice trading on a demo account. Pretend that virtual money is your own real money when you trade on the demo account. Do not open a live trading account until you become profitable on your demo account. Double you account first demo trading. You can only be successful if you stick to a system and a plan.
When you start forex trading, in the beginning just choose two major currency pairs that you will trade. It becomes very difficult to keep tab on the all major currency pairs. You should start with a major currency pair because the spread on the major pairs is the best and they are the most liquid. EURUSD pair is the most commonly traded pair. It usually has the best spread because of its liquidity.
The USD/CHF is the most volatile and moves the most during the trading week. The USD/JPY moves a lot on the news out of Japan. GBP/USD is the most stable of the above three pair.
Follow and understand the daily forex news and analysis of the professional currency analyst. It is important to get a birds eye view of the currency markets and the news that affects the prices. It is also important that you know and understand what the key technical support and resistance levels are in the currency pair that you want to trade.
Support is the predicted level when buying pressure overcomes the selling pressure. It is at this point the currency pair moves up on the charts. Buy at the support level. Resistance is the predicted level when selling pressure overcomes the buying pressure. It is where the currency pair moves down on the charts. Sell on the resistance level.
Fortunately all the best forex news and analysis is available freely online. While you are reading the technical news and analysis, write down on a piece of paper what direction the analyst are saying about the currency pair that you are trading and the key support and resistance level.
You should learn technical analysis and how to use technical indicators. Never ever trade without stop losses! Learn how to use technical indicators on the charts. Learn to be patient.
It is important for you when you are trading to be disciplined. Avoid emotions! Stick to a system and a plan. Dont just try to trade your gut feeling. Depending on your risk appetite and strategy, set your stop losses accordingly when you trade.