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Day Trader ~ forex trading hours new years day
The day trader has more patience and wants to go for a bigger move than the average goal of 15 pips. This requires trading off larger time intervals such as the 30-minute and 4-hour charts. The day trader is looking for wider ranges of 60 pips or more to locate a trade preferable near support or resistance. This trade requires a “sniper” mind-set to wait for the right pattern.
Day traders are big momentum traders. This means that they look for a certain directional bias and go long or short based on the current movement, or wave, at that time. Part of the strategy entails looking for possible breakouts from tight ranges, especially when certain news announcements
fare better or worse than forecasted numbers.
Day trading offers these top three advantages:
1. Peace of mind. Day traders sleep soundly at night knowing that they do not have any open market positions. As long as a position remains open in the forex market, it is exposed to risk. Examples of risk include market gapping, which happens when prices are non-existent during
brief periods because of market volatility.
If a trader ’s stop loss is located in the gap, the trade might not close out. If this happens, the trader has a higher risk exposure. Since day traders close out their positions by the end of the trading day,
market gapping risk is hardly present.
2. Easy analysis. Day traders love the news, because news often injects momentum and causes currencies to move up or down. As positions are closed out every day, day traders do not subject themselves to analysis paralysis. This trading disease happens to many news traders who grapple with the concept of how much markets tend to price in upcoming news or released news.
Since day traders are momentum traders who take advantage of the fi rst moves, analysis is easy and straight forward.
3. Structured calculations. This is also one of the benefi ts of starting with a clean slate every day. When trades are left hanging in the market, equity and margin levels constantly fl uctuate to refl ect the current size of the open position. This fl uctuation can confuse traders who need to make adjustments when they calculate their lot size for the next trade.
Day traders do not have this problem because trades are closed out at the end of the day, and lot sizes are calculated on a clean slate the next day.
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