The behavior of the market within the day is important to all Forex traders especially to those who are into short-term trading business like scalping, day trading, and swing trading. To these traders, the most important of the daily Forex trading strategies is the daily chart. A daily chart is a line graph that shows intraday movements of a given security. Trading using the intraday movements is not only stressful but also very demanding too for focus and energy.
How it Works
Trading using the daily charts is easier as compared to the intraday fluctuations. A daily chart reflects all of the price movements for the period and is typically used by day by traders to implement short-term strategies. Out of these daily charts, Forex trading strategy charts can be derived that are ideal for those with full-time employment. In a way, this means the translation of the daily trends into plans, daily Forex strategies, and risk management strategies. It also gives these people the opportunity to trade full time after work and the chance to build a huge equity base slowly but surely. This is quite possible because some of these daily Forex strategies are capable of generating 100-500 pips per trade without the need to be glued on the computer for hours when trading. Incidentally, pip (or pips) means “percentage in point” and it refers to the smallest price fluctuation of a currency as it relates to another currency. A pip’s value is 1/100 of a cent.
Alongside the use of the daily charts is the so called Daily Timeframe Strategy which is based on two indicators: Bill William’s Acceleration/Deceleration Indicator (AC) and the Stochastic Oscillator. According to William, price change is triggered by momentum changes, which in turn are influenced by acceleration and deceleration. Hence, being able to identify acceleration and deceleration is enough to anticipate what’s forthcoming. Meanwhile, Stochastic indicates events of overbought and oversold in the trading market. Daily Forex trading strategies like this Daily Timeframe Strategy must be practiced at least on a demo account to see how easily it can make hundreds of pips per trade.
Using daily Forex strategies strive to develop your own indicators to watch out for. Since Forex is unstable, make sure you know the signs when it is volatile. This is how traders end up losing money. One does not need to dwell too much on the technical aspects. Keep things simple just like how daily Forex strategies work.
Author of the article is Zahir, an Analyst from Forex Trading Egypt, you can find more helpful tips here http://www.investopedia.com/forex/strategies/
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