Don’t waste your time – keep track of how NFP affects the US dollar!
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It is another short-term trading style. A day trader normally takes a single trade a day and closes it once the day is over.
The key goal of a day trader is to generate profits within the course of a day; they don’t like keeping their position open overnight.
This style of trading suits best those FX traders who have plenty of time throughout the day to analyze the market situation and adjust their position in accordance with the intraday fluctuations of the price. If scalping is too fast for you and swing trading is a bit slow, it means that you’re a day trader.
A day trader should have strong analytical skills, actively use various indicators and other technical tools. Also, he/she has to have a sound background in economics to be able to recognize fundamental trading signals. Also, he/she should have a truly powerful exit strategy to close his/her opened positions with the highest returns at the end of the day.
Since day traders frequently turn over their positions, they normally trade with liquid currencies to limit spread costs.
A good example of a day trader is Martin S. Schwartz, the man whose steel nerves and great intellect earned him great fortune and the well-deserved name of Pit Bull. He received national attention when he won the US Investing Championship in 1984. His day trading style became invincible at that time. He never held a position open for a long period of time. To make his bets he followed technical indicators and received trading signals from economic reports and other tools of fundamental analysis.
When it comes to news and fundamental data, most traders just focus on the actual numbers and then wonder why the markets are not behaving according to the news release. Marty Schwartz believed that a trade should be based not on the actual number printed in the headline of economic release, but on the reaction of the market participants that appears after the publication of the data. Marty advised traders to forget about their guesses, thoughts, and listen to what market is telling, because the purpose of trading is not in the confirmation of your guesses, but in earning money.
Our day trader often used technical indicators for the prediction of price direction. His all-time favorite analytical tool is 10-period exponential moving average (EMA). This technical instrument helped Marty to distinguish between bullish and bearish scenarios in short-term trades.
