The Complete Day Trading Guide You Need
6 min read

No matter which fields you are investing in, forex, cryptocurrency or stock market, there are many trading strategies from short term to long term. One of the most noticeable strategies recently is Day Trading which is getting more and more applications thanks to the profit taking time of the day, hours or even minutes.

The question is, what is exactly Day Trading? This article will provide basic information about this trading style and important information for you to update and determine whether you are suitable for this type of trading and decide to adopt it or not.

What is Day Trading?

Simple explanation of Day Trading, it is an activity of trading financial assets or instruments that only takes place during the day, not holding orders overnight. The opening and closing of an order are not separated beyond the 24-hour range. That means you will need to trade every day if you want a steady stream of profits.

The holding time of these orders can vary depending on trader’s analysis:

  • Less than 1 hour: also known as Scalping, only suitable for people with a lot of experience because the time frame is too short to predict the market price. It also makes it difficult to complete the plan within a day.

  • 1 to 12 hours: quick decisions are needed and follow the market more closely. It seems a little easier to control the plan but still highly ask to make a profit.

  • Half day to 24 hours: a popular and ideal holding period for Day Trading because the timeframe is just enough to capture the volatility as well as analyze the chart.

Basic Steps To Start Day Trading:

  1. Choose the strategy: Determine opening and closing point. A good starting point is to focus on major currency pairs – which offer the tightest spreads and lowest levels of volatility.

  2. Sign up to a reliable broker/exchange: You will need to have a top-quality forex broker on your side to engage in Day Trading

  3. Practice with the demo account: In case you are a complete newbie, starting off with a demo account would help you save a lot of money.

  4. Trade: Once you understand and are comfortable with how forex Day Trading works you can start buying and selling currency pairs in the live markets.

Pros and Cons of Day Trading

To find the opportunities for taking profit and challenges to overcome, we need to identify the pros and cons of Day Trading. In result, reflect on yourself to improve the skill in case you decide to use this strategy.


  • Minimizing deep losses: Since trades are closed in the short term, when the economic situation has the stage of negative fluctuations for a while, traders can cut their losses early so as not to bury your money for a long time. 

  • Stable profits: By the right analysis techniques, daily orders will bring regular income and they are very easy to adjust. In some ways, loss orders could be compensated by other profit orders in one single day.


  • High Pressure: The requirement to take profits in the short time as much as possible requires traders to monitor the chart continuously. This can affect investors' psychology and lifestyle 

  • Impact on long-term portfolio: Although providing steady profits, due to short-term time, it is not possible to expect high profit on each order. In the long term, the amount of money a trader gets may not meet expectations like strategies with a wider timeframe.

  • Need a big enough capital: Since the intraday profit fluctuates not too high, traders need to invest with a medium to high capital to receive a worthy return.

Day Trading Types

1. Trend Trading

The most popular choice made by traders. Investors will follow the news, look for information that causes high volatility in economies and put trading volume on those currency pairs. This is the simplest way of Day Trading and requires traders to quickly update the market situation and use price trend analysis tools.

2. Countertrend Trading

Instead of following the crowd and putting capital into the trends of the economy, going in the opposite direction is one way to get a breakthrough in interest rates. However, it does not mean placing orders against the trend, you need to have skills in finding niche factors, the ability to predict the development of less-noticed currency pairs. This requires traders with considerable depth of experience and knowledge.

3. Breakout Trading

When price moves within a certain range for hours and narrows, some traders identify this as a sign of a larger movement. This makes traders quickly identify the uptrend or downtrend of the price and start placing orders. Traders can execute one or more breakout orders during the day.


Equip with knowledge and experience

To get consistent profits every day, traders need to equip themselves with a solid technical analysis background. Even with solid knowledge, there are exceptions from movements on the market. Without good technical factors, Day Trading will be risky. At the end of the month, the total loss day is higher than the profit day is inevitable.

Choose high volatile trading pairs

Despite forex, stocks or cryptocurrencies, price history has proven that most price lines will be sideways, so choosing a highly volatile currency pair with good liquidity will help Day Trading go smoothly. EUR/USD or GBP/USD are examples, currency pairs with high volume and high volatility on the trading chart.

Pay attention to the indicators

Popular indicators, often used in technical analysis include: 

  • Relative strength index (RSI): which falls under the umbrella of a momentum indicator, looks to see whether a currency pair is potentially overbought or oversold.

  • Fibonacci: Although not a technical indicator expert, looking for support and resistance levels is such a great solution to identify pricing trends as a Day Trading forex newbie.

  • Lagging indicator (MACD): As moving averages, they will provide an overview of the average price of a forex pair over a specific timeframe.

Besides finding an effective indicator to trade with Day Trading, traders need to know how to combine them together, then you can obtain a reliable result. To read more information about indicators, you can visit FXCE Library - where there is a lot of knowledge of indicators, trading systems so that traders can refer to their EAs or trading styles.


Technical analysis will not work if you keep trading according to your emotions and moods. Adhering to the analysis and seriously learning and drawing from it will help traders not to take profits too soon, wrong ideal price zones and similar mistakes to optimize profit/income sources.


Without spending too much time, Day Trading will be an opportunity to make quick money for traders who master knowledge and trade well. Understanding the definition and basic information, let's take a closer look at this strategy to be able to apply it to your overall strategy.

In general, behind each investment method is a requirement from the trader's basic knowledge, experience and capital management skills. On the way to accumulate those things, FXCE always accompanies you to provide interesting knowledge, services, and contests to the community: