Currency Day Trading

Currency day trading or scalping is the most popular way for new traders to seek bigger currency profits and the idea is to trade for small regular profits and keep risk to a minimum.

While the idea sounds great there is a problem which causes traders to lose money and the problem is simple – all volatility in short term time frames is random and this means, support and resistance levels are not valid, the trader can't get the odds on their side and this causes losses. Let's look at why in more detail.

The Rise of Internet Currency Trading and the Impact on Day Traders

Before the rise of internet currency trading, some traders had an advantage in that they had the price before the vast majority of traders.

There are many famous floor traders who used this small time window to gain an advantage to make a quick profit but this advantage has now gone. Today, all traders around the globe have instant price information if they have an internet connection and the time window for day traders to make big gains has gone.

The Rise of the Internet and Day Trading Systems

While the rise of Internet currency trading has seen day traders start to lose money, there has at the same time, been a huge rise in vendors selling currency day trading strategies and systems.

These vendors look to take advantage of naïve traders who are attracted by the concept of making small regular profits with low risk. Vendors feed on the greed of these naïve traders and each week sees yet another strategy or day trading robot up for sale, traders buy them and of course they lose. None of these systems have an audited track record of real gains and are so cheap because they don't work – not because they do!

Trading the Odds

There are many people who say that in short term time frames there is an order to currency trading but this is not so. Currency prices move to the odds not certainties and you will never get the odds in your favour when trying to trade within a daily time frame and FX scalping strategies simply don't work.

Trading within daily time frames sees numerous losses and if the trader is lucky enough to hit a winning trade, it gets closed out before the end of the day and is never big enough to cover the numerous losses taken.

How to Make Profits in Currency Trading

Currency day trading strategies require a lot of work and effort but they simply lose money. If you are looking to make money, you need to trade longer term and this means either using Forex swing trading or trend following strategies which mean you trade longer time frames where you can get the odds on your side.

So forget about using FX day trading strategies, focus on the longer term moves and you will make a lot more profit and also spend less time on your trading.