All existing strategies can be divided into four groups: scalping, intraday trading, medium and long-term tactics. As practice shows, intraday strategies are the most popular. For scalping, you need nerves of steel and experience, and for medium and long term – patience. Intraday forex trading seems to novice traders the most attractive in terms of the ratio of complexity and performance. In part, this is the case, but for some reason, the pitfalls are unrecorded. Read more about the advantages and disadvantages of such tactics.
Intraday Forex Trading: Making a Choice
Intraday trading is a strategy where an open position opens and closes within one day, regardless of the duration of the sessions. Volatile instruments are used as an asset, most commonly TOP currency pairs (gold, oil, pork or wheat, exotic pairs are more suitable for medium- and long-term).
The advantages of intraday forex trading:
- No swap. This commission for postponing the position the next day makes unprofitable trading in volatile markets. Not for nothing, many traders before the weekend (triple swap) fold positions. However, sometimes you can earn money on it (Carrie Trade).
- The rate of profit. Many traders are not willing to spend a few days waiting for a signal that may turn out to be false. Intraday Forex strategies are the optimal combination of the load on the trader, time and effectiveness of tactics.
Disadvantages of intraday Forex trading:
- Psychological and emotional stress. A trader must monitor signals all day and manage to monitor open trades. In this case, the role is played by the interface, alerts (sound signals) and color, visually convenient indicators of the type of switchmen. But nevertheless, the problem remains.
- Spread. For the day, even with high volatility, the price does not have time to go far from the starting indicators. The earlier the transaction is closed, the lower the profit will be, which the spread can be reduced to zero.
- The difficulty of determining the direction of the trend. The strength of the trend is influenced by news (a fundamental factor), but inside the day one can often see rivalry between bulls and bears, which wobble the market in different directions. The trend direction can be assessed at intervals of M15-H4, but this does not always fit into intraday tactics.
Conclusion. There are no ideal strategies; everyone decides for himself what he likes most. However, no one forbids combining several different variations. Nothing prevents you from launching a long-term strategy on one monitor, and looking for signals for an intraday Forex strategy on the second monitor. Find what you like and share your experience with our readers in the comments or the forum!