Intraday trading is believed to be one of the most complicated types of Forex trading and, at the same time, the most widely used by independent traders. This trading system suggests opening and closing positions on Forex within one day, i.e. within 24 hours. Its popularity among traders can be easily explained by several reasons. First of all, it requires a small size of investment capital (initial deposit) and, of course, a trader's desire to get huge profits from trading with great leverage. So when talking about intraday trading, we mean opening trading positions with the duration from several minutes to several days.
Short-term trading is considered a rather difficult method because its results are influenced by the market noise, which can have a significant range sometimes compared to the average range of day fluctuations. The entire intraday trading is based upon market noises where a trader’s goal is to catch fluctuations of small and middle size (from 10 pips to 200 pips).
The main advantage of intraday trading is the possibility of working with small investment capital, opening numerous positions during one trading day, and setting rather tight stop orders (Stop Loss and Take Profit). It should be mentioned that in terms of profitability, short-term trading can be more preferable to long-term trading. Basically, it is the full list of intraday trading advantages.
The following features of the short-term trading are generally considered negative:
* constant pressure;
* chronic fatigue;
* long working days;
* high risks;
* high labour costs.
For intraday trading, you need absolute discipline, calmness, quick reaction, and, of course, infinite patience. Without these main qualities, there is a huge risk of losing your entire deposit in a very short time. But the real key to success is a reliable and effective trading strategy, specially developed for intraday trading. This strategy allows a trader to make the right decisions in a limited market space and time.