Forex Trading Strategy
Day trading a short-term trading strategy where you’ll hold your trades for minutes or even hours (it’s similar to swing trading but at a “faster” pace).
The timeframes you’ll trade on are usually the 5mins or 15mins.
As a day trader, your concern is to capture the intraday volatility.
This means you must trade the most volatile session of your instrument because that’s where the money is made.
So, you’ll likely:
- Buy Support
- Sell Resistance
- Trade breakouts
- Trade pullbacks
- Trade the bounce of the moving average
If you’re a day trader, you won’t be concerned with the fundamentals of the economy or the long-term trend because it’s irrelevant.
Instead, you’ll identify your bias for the day (whether to be long or short) and trade that direction for the session.
Below is the chart of USDCAD (4-hour timeframe) at 1.2900 Resistance.
If the price can’t break above it, chances are, today will be a “down” day.
On the 15-minute timeframe, you noticed a Shooting Star has formed which signals selling pressure.
You can take a short trade with possible target profit at Support (blue box).
Here’s what I mean:
Now, let’s discuss the pros and cons of day trading…