Forex Day Trading - are you Ready?

By: Harold Hsu

What is a day trader?

Day traders are traders who close their open trade positions by the end of every day. They usually trade on the smaller market price fluctuations for small profits (or losses). Day traders include both institutional traders (like the big banks) and retail traders (like you and me).

In this article, I'll assume that you're interested in become a retail day trader (and not an institutional day trader).

What it takes to be a retail day trader

Before you decide to become a retail day trader, you'll first have to consider these questions:

1.Am I ready to commit to the time demands of day trading?

Day trading often requires you to sit in front of the computer for long hours in anticipation of good market entry setups. Because day traders open and close their trades in the short time span of a day, every opportunity for a good entry is precious. As a retail day trader, you really can't afford to let good entry setups slip away. If you'll need to be constantly away from your trading terminal (or computer), then day trading might not be for you.

2.Am I ready to commit to the physical strains of day trading?

This is similar to the previous point. As I mentioned before, day trading requires you to sit in front of your trading terminal for long periods of time. Many new traders make the mistake of thinking that Forex day trading only takes one or two hours a day - but in reality that's very far from the truth. Profitable day trading requires high levels of concentration for long periods of time, and unfortunately these demands of day trading are a little too harsh for a lot of people. Backaches, eye strains and headaches are common complaints among would-be day traders; and if you're unable to handle these harsh physical demands, perhaps a better option would be to consider swing trading, or position trading instead.

Conclusion

These are just some of the many considerations you should think about when deciding on the trading style you wish to adopt. Too many new traders think that day trading only takes a little effort and time, but that's hardly the case. In my experience, day trading is pretty demanding, so you'll need to be both physically and emotionally prepared to handle it.

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