Today the foreign exchange market also known as Forex provides traders with some advantages absent from the stock market, so it is worthwhile for them to learn a bit more about the biggest financial market in the world. Day Trading is simply the name given to any type of Forex trade which is executed on any one given day of the week on which the expiry time of that trade is on the very same day.
Some of the more commonly day-traded financial instruments are stocks, options, and a host of futures contracts such as equity index futures, interest rate futures, currency futures and commodity futures. Day trading was once an activity that was exclusive to financial firms and professional speculators. Many day traders are bank or investment firm employees working as specialists in equity investment and fund management. However, with the advent of electronic trading and margin trading, day trading has become more common.
Traders who participate in day trading are called day traders. Traders who trade in this capacity with the motive of profit are therefore speculators. Whilst it is possible to place a Forex trade to expire in several days, weeks or even months many traders prefer to only have live trades open which are going to expire on the same day, to allow them to hopefully make a profit over the short term.
Day trading Forex is very popular because it is exciting, because there can be a lot of action, and because it is easy to see all the intra-day price movement and think this can be converted into lots of profit. Because of the nature of financial leverage and the rapid returns that are possible, day trading results can range from extremely profitable to extremely unprofitable, and high-risk profile traders can generate either huge percentage returns or huge percentage losses.
Day trading is very challenging, both technically and emotionally. There are so many things that have to go right in order to consistently make money that it becomes very easy to lose. Most traders who try to trade like this are not successful. That does not mean that you cannot be, it just means that you have to be skilled, organized, and emotionally stable in order to have a good chance of winning.
