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What is day trading? An Introduction to Trading Strategies for Beginners. | Kempton Express

In this article, we help you to get a better understanding of what day trading entails and outline some of the best day trading strategies for beginners to use online. We also discuss some of the best tips and tricks that every day trader should know about, as well as inform you on the tools…

In this article, we help you to get a better understanding of what day trading entails and outline some of the best day trading strategies for beginners to use online.

We also discuss some of the best tips and tricks that every day trader should know about, as well as inform you on the tools you would need to become a successful day trader.

A Brief Definition of Day Trading in the Foreign Exchange Markets

Day trading is seen as the act of buying and selling foreign currencies in one trading day. Day traders, also known as active traders, consist of those people who have some experience in trading and are typically well-educated on all the topics that concern the Foreign Exchange Markets.

In most cases, day traders choose to register with a regulated forex broker that offers high leverages and short-lived strategies to take advantage of opportunities where they can maximise profits online. Leverages is the amount of money a trader borrows from their broker. This money is used to invest in different markets, such as Forex, Commodities and even the Shares markets.

Beginners who are new to the concept of day trading should spend some time watching tutorials or reading up about the concept before starting to trade online. This will protect them from suffering unexpected losses and becoming discouraged after dedicating so much of their time and effort online.

What Are Day Trading Signals?

Day trading signals act as indicators to traders who are searching for clues on when to buy or sell online. This ultimately leads to a higher profit and success rate when trading.

Advantages and Disadvantages of Day Trading

When you choose to become a day trader, you will have the opportunity to take advantage different price movements in the Foreign Exchange Markets during a period of one trading day. This means that you do not have to hold your trading position open throughout the course of the night and run the risk of big price changes that could influence your profits while you sleep.

Other advantages and disadvantages day traders can look forward to includes;

  • Day traders have the opportunity to take complete control over their success in the Foreign Exchange Markets. As a day trader, you will have to work really hard to devise working strategies that will ensure profitable trades. Take time out to set daily targets for yourself, view analytical charts and other technical analysis tools to keep track of the movements occurring during your trading session.
  • When you choose to become a day trader, you will never have to worry about falling stock prices or struggling markets. This is because day traders take advantage the fluctuating price movements by identifying market patterns and finding indicators of when would be the perfect time to trade.
  • Since day traders only buy and sell during the course of one trading day, they often at time will miss out on any price gaps that occur overnight.

The Current Debate Around Day Trading as a Successful Career

The concept of day trading seems to be one of the most debatable topics in the financial markets. Most often, people claim that day traders are tricked into believing that they can make quick money online. This, however is not the case.

Day traders are well educated about on all that occurs in the Foreign Exchange Markets and just like any other trader, they come up with working plans that ensures profitable trades.

While the thrill of investing in foreign currencies in one day seems to be on the rise, it is important to note that day trading also has its own risk factors.

Risks of Day Trading

Although there are great benefits to trading in one single day, traders still place themselves at a high-risk level. Some of these risks are derived from:

  • lack of trading knowledge

Trading knowledge is one of the most powerful tools a trader can have. This involves understanding the basic principles and concepts of the financial markets.

Some people choose to day trade without having much knowledge about the markets or without knowing what the correct procedures are to follow online.

Without having the correct knowledgebase, a trader unknowingly becomes one of the biggest risks to themselves.

Should you choose to succeed as a day trader, it is important to start by understanding what is expected of you. This can be done by actively participating in forex courses, seminars, webinars and even reading eBooks on trading topics. Once a trader has all the necessary information needed, it would then be best to put that theory into practise by choosing to engage in trades online.

  • The loss of capital

Capital loss is one of the biggest risks a day trader will have to face. Besides from the actual loss you could face while trading, day traders also run at a loss each and every time they purchase new software, pay commission fees or choose to invest in other services that need to be paid for online.

The best option would be to start out on a smaller scale and find opportunities in fewer stocks in the financial markets.

What is the best day trading strategy for beginners?

Scalping

Scalping is one of the most popular day trading strategies used in the Forex market.  This trading strategy takes advantage of small price gaps that are usually created after a trade has been executed.

Traders who make use of this strategy will make profits by buying and selling foreign currencies online. Scalping requires the trader to hold their position open for a short period of time before closing it for a small profit.

Day traders who choose to use the scalping method will be able to actively participate in hundreds of trades in one single day and run a lower risk rate online.

Some of the most popular ways in which day traders look for possible opportunities to maximize profits include;

  • By looking at small price changes in the financial markets.
  • Keeping up to date with the latest market news and trends that will activate any price movement.

Range Trading

Range trading deals with the fact that traders identify overbought or oversold areas in the markets.

All traders who choose to use the range trading strategy would usually buy in the oversold market ranges and sell in the overbought areas online.

To be a successful range trader, you would have to find the support and resistance area of price in the markets.

Just like with any other trading strategy, it is very important to make sure that your broker provides risk management strategies for you to use online.

Some of the most successful methods of risk management for range traders would have to be;

  • Stop-loss order.

A stop-loss order is an instruction to buy or sell once the markets have reached a certain point online. This order is usually given to broker that you use fore trading and holds the purpose of preventing losses during a trade.

Technical indicators can be defined as price and volume calculations that assist traders to identify trends and price movements that occur in the Foreign Exchange Markets.

All traders should look out for leading indicator and lagging indicators.

  • A leading indicator are all those things that influence economic change. Leading indicators for day trading can be found with tools such as an economic calendar. This will assist traders to find out what important events are taking place in the economy and would it have any effect on price movements.
  • Lagging indicators consists of all those signals that only become noticeable when there is big movement happening in the financial markets. These types of changes usually have a great effect on the market in which it occurs since changes the current market trend in a completely different direction.

Fading trading strategy

Fading is a strategy that requires a trader to place their bid against a prevalent trend, in the hopes of gaining a turnaround profit. This method is seen as a high-risk trading strategy because it goes against what is considered to be the norm in the financial markets.

Traders who practice fading would choose to invest when the markets are falling and start selling when prices are on the rise. This risky move is based around the traders hopes that the financial markets will compensate its losses once there is stronger movements online.

Momentum trading strategy

The Momentum trading strategy involves buying and selling assets in the financial markets. A trader who uses the momentum strategy would choose to sell their assets when its price has reached the highest point.

The main idea behind the system is that the market will place enough force on current price movements, thus causing the price to stay in the same direction as before.

Momentum traders really take their time to analyse the strength of the market before deciding to place an opening bid.

Breakout trading strategy

The breakout trading strategy is used when prices tend to move slightly outside of their normal range.

A breakout trader would choose to enter the market when the stock price breaks out lower than its normal price range.

There are two types of breakouts that traders tend to look out for when using the strategy. These include;

  • Support and resistance breakout 

These are the two main indicator levels that are used with the support and resistance breakout strategy.

When a trader identifies the support and resistance areas that are being used repeatedly, eventually a trader can expect a breakout to occur within that area. This is when he/she can use this strategy to take advantage of any opportunities where profits can be made.

  • Swing high and swing low breakouts 

Swing high and swing low indicators can reveal very important information to day traders that can be applied at any given time during their trading session.

Swing low is when price movements hit an ultimate low in the financial markets.  Once price movements have hit their lowest points a trader can expect high swings to occur shortly after.

Some of the benefits of the breakout strategy include the fact that the trader would know almost immediately if their strategy worked or not since trading occurs in real time.  This makes it easier for the trader to identify if he or she executed a profitable trade online

Using pivot points

A pivot point is one of the most common technical analysis tools / indicators that traders used in different time frames.

The pivot point is the average of the high and low-price movements in the Foreign Exchange Markets.

This indicate to the trader what would be the best area of opportunity to trade. There is a special formula which thread is used to calculate pivot points.

Creating Your Own Trading Strategies

During your trading career there would come a time where you would need to create your own working strategies to use online.

To do so, you would need access to market chart and technical analysis tools. These tools are usually supplied by the broker you choose.

Once you have access to the technical analysis tools you will be able to formalize working strategies to use for trading purposes.

Pay close attention to price movements to find potential gaps in the market. It is at those gaps where traders usually find opportunities to make profits online.

Even though it is important to look for potential opportunity is it is equally important to identify areas to use as exit points.

Since the Foreign Exchange Markets are always evolving it is important to keep in mind that not all strategies work forever.

Day traders like to take advantage of the time when their strategy is working for them.  As you fall into the pattern of entering and exiting sessions you find which strategy works best for you.

Factors to Considers When Choosing to Become a Day Trader

If you are interested in becoming a day trader, keep these factors in mind when deciding if this is the best option for you;

  • Do you have the correct tools for trading?

Over the years trading in the foreign exchange market has become so technologically advanced that brokers are even keeping up with the latest software trends to provide their clients with the best user experience.

As a day trader in 2020, you would find that there are hundreds of dedicated software and platforms that are used for trading.

It is important to make sure that you have all the necessary equipment and tools to execute trades as quickly as possible.  This will ultimately lead to profitable and successful trades online.

Day traders need to ensure that they use an electronic communication network (ECN) to keep away from paying high commission fees for each trade executed.

  • Do you have enough capital to start trading daily?

The initial stages of trading can become very costly, especially if you are a day trading beginner that has no experience in the financial markets.

As a day trader, you will be working with multiple markets and products in one day. This could range between Forex, Indices, Precious Metals and even Stocks. For this reason, it is vital that day traders keep account of the funds they would have to invest before reaching a state of profit.

If you are a beginner trader, try to look for brokers who offer welcome bonuses to all their new clients. This will work out to your benefit since there is no minimum deposit involved. Diversit-e Smart Trade College has partnered with a FSCA regulated Broker that offers many different bonuses. Clients funds are also kept in a segregated account, meaning operational costs are kept separate from Clients’ funds.

No deposit bonuses require the broker to pay their new clients and amount of funds that should only be used for trading purposes. These funds are not allowed to be withdrawn from the trading account, but the profits incurred can be taken out by the trader after they have successfully completed a trade.

  • How much time are you willing to invest?

Day traders usually spend countless hours trying to analyse the markets for the best time to invest. This requires a lot of patients and concentration from the trader should they want to find those short-term profit margins.

It is common to find that day traders spend time to come up with working strategies before they actually test it out in the Foreign Exchange Markets.

Before deciding to become a fully-fledged day trader, make sure that you understand that it will take a great amount of time before you see large profits online.

How to Choose the Best Broker for Day Trading

It is important to keep the following factors in mind when choosing a broker for day trading;

  • Execution speed

As a day trader it is important that the broker you choose offers a high execution speed. This is because day traders usually perform large amount of trades in one single day.

  • Trading platform

Make sure that the trading platform you choose caters for all your needs.  Be sure to take time out to explore all the tools that the broker offers.

Some of the tools that a day trader should look out for include stop-loss orders, negative balance protection schemes and even analytical charts.

  • The level of customer care and support you will receive as a trader.

It is important to make sure you will receive the support you need. The level of customer cares a broker provides often makes or breaks the success of their traders online. At the time of publishing this article has Diversit-e Smart Trade College been proudly reviewed as the “Best Education and Support” company in our industry for almost 6-consecutive months.

Diversit-e Smart Trade College and our partner-broker supply our Clients with unlimited support in the form of live chat functions, web based and even personalised mentoring and support.

  • Regulations and safety of funds.

Make sure that the broker you choose is a in fact regulated.  A regulated broker is a company that complies with certain rules that control and protect the Foreign Exchange Markets.

In terms of safety of funds, most brokerage companies keep their clients fund safely in a segregated account. The segregated account guarantees traders that the company will not use their funds should it suffer any financial loss.

  • The markets and products the broker offers

Day traders tend to tap into different markets during their trading sessions. It is important that the broker you choose offers a wide range of products online. Some of the most common market products broker offer include Forex, Commodities, CFD’s and Cryptocurrencies.

If you choose a broker that provides very limited market options, this could harm your chances at becoming a successful day trader.

Although the options you would be presented with may seem endless, it could be best for you to choose to invest in one market at a time. This will allow you to pay full attention to the activity taking place within that specific market and easily find opportunities to make profits online. Take time to research what would be the best market for you in terms of your lifestyle and goals you would want to achieve in the Foreign Exchange Markets.

Even though there is a lot of speculation around day trading and if it is in fact a profitable career, those traders who choose this path can look forward to benefiting from shorter trades and small profits online.

When you are deciding on whether to become a day trader keep in mind that day traders play an important role of keeping the financial markets liquid.

Allow yourself the freedom and invest quality time to do proper research to determine what day trading in forex and is, what it requires and if it is for you. Should you be interested to become a day trader, first take the initiative to find the best broker for you who will allow you to open a demo account online. The demo account option will allow you to practise trading in real time without having to invest any of your own personal funds into your account.

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Donald Trump blasts ‘fools’ who oppose good Russian ties

US President-elect Donald Trump has posted a progression of tweets censuring the individuals who contradict great relations with Russia as “‘dumb’ individuals, or nitwits”.

Mr Trump promised to work with Russia “to comprehend a portion of the numerous… squeezing issues and issues of the WORLD!”

His remarks came after an insight report said Russia’s leader had attempted to help a Trump race triumph.

Mr Trump said Democrats were to be faulted for “gross carelessness” in permitting their servers to be hacked.

In a progression of tweets on Saturday, Mr Trump said that having a decent association with Russia was “no terrible thing” and that “lone “idiotic” individuals, or simpletons, would believe that it is awful!”

He included that Russia would regard the US increasingly when he was president

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Bulls and Bears Took on More Currency Exposure in Week Through January

he most striking improvement among theoretical situating toward the finish of a year ago and the primary session of 2017 is not that modification were little. There was just a single gross theoretical position modification of more than 10k contracts. With sterling apparently not able to maintain even humble upticks, the bears added 13.1k contracts to the gross short position, lifting it to 120.2k contracts.

Or maybe, it is eminent that examiners for the most part added to positions, long and short, as opposed to close positions at the very end of the year. Examiners added to net long outside cash prospects positions, aside from in the Japanese yen and Swiss franc where 2.6k and 2.5k contracts were exchanged separately. Examiners likewise added to gross short positions. Here there was just a single exemption, the Japanese yen. Despite the fact that the dollar shut comprehensively higher in front of the end of the week, every one of the monetary forms we track here, spare the Mexican peso, picked up against the dollar in the three sessions since the finish of the CFTC reporting period.

Every once in a while it is helpful to review why many market members take a gander at the theoretical situating in the cash fates advertise. It is not that the outside trade is essentially a prospects showcase. It is principally an over-the-counter market in which every day turnover midpoints in abundance of $5 trillion a day.

Trade exchanged monetary forms and alternatives represented around 3% of the normal day by day turnover as indicated by the BIS study. Be that as it may, past reviews have discovered some contemporaneous connection between’s market heading and net position changes. We think it additionally offers knowledge into a specific market section of pattern supporters and energy brokers. It is not by any means the only device, yet one of a few data sources.

One ramifications of this is albeit theoretical positions in the money fates market are moderately extensive, it is still little contrasted and the money showcase. Along these lines, it is difficult to see the genuine essentialness of a record vast position, as though there is some market top. At some point, examiners are not driving the costs, possibly there is another fragment, national banks, enterprises, as well as genuine cash that is more essential at any given minute.

We invest some energy taking a gander at gross positions instead of just net theoretical positions, which is the more customary approach. We think a more granular look is frequently fundamental. There is a distinction between short-covering, for instance, and new purchasing, however it appears to be identical in the net. Additionally, the gross position is the place the introduction is not the net position. A net position of zero does not mean the market is nonpartisan. Net positions could be huge, which implies a short press or a negative stun could in any case troublesome. The positions that must be balanced are captured in the gross measure not the net figure.

We find numerous customers are likewise keen on theoretical situating in the US Treasuries and oil. The net and gross short theoretical Treasury position has swelled to new records. The bears added 23.8k contracts to the as of now record net short position, lifting it to 616.2k contracts. The bulls attempted to pick a base and added about 20k contracts to the gross long position, which now remains at 471.2k contracts. These modification prompted to a 3.8k contract increment in the net short position to 344.9k contracts.

The bulls delayed in the oil prospects toward the finish of 2016. They exchanged short of what one thousand contracts, leaving 608.1k gross in length contracts. The bears added 4.1k contracts to the gross short position, giving them 168k. These conformities trimmed the net long position by very nearly 5k contracts to 440.1k.

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3 ways to profit in the ‘year of the dollar’

In December, the Federal Reserve raised loan fees for the second time since the Great Recession and included the desire of a 2017 financing cost climb to its gauge. Furthermore, only a couple days prior, the abundantly anticipated minutes from the most recent Fed meeting demonstrated the most hawkish tone from the national bank in two years.

In the meantime, Europe has been dove into political turmoil after a year ago’s Brexit vote and the later abdication of Italy’s leader. Somewhere else, the Bank of Japan proceeds down the way of negative rates and forceful security purchasing.

Put it all together, and it isn’t astounding that the U.S. Dollar Index is up against 14-year highs.

Speculators may have missed so much discussion on account of babble about the Dow Jones Industrial Average at the end of the day almost hitting 20,000. Be that as it may, paying little respect to your assignment to stocks or your venture skyline, this sort of huge picture incline in the dollar implies right now is an ideal opportunity to position your portfolio to benefit and, maybe most critical, to keep away from a portion of the pitfalls that can originate from a solid local cash.

Here are a couple ideas dollar exchanges ought to consider:

Residential plays over multinationals

There’s a considerable measure of seek after shopper stocks in 2017 on account of an enhancing work market and any desires for a jolt under a GOP-controlled Congress and President Donald Trump. In any case, remember that not all retailers are made equivalent especially those with abroad operations that are adversely affected by the wide dissimilarity in monetary standards at this moment.

For example, retailer Wal-Mart Stores Inc.(WMT) said troublesome money trade rates shaved very nearly 2.5% off profit for each partake in the second quarter of 2016. On the other hand consider that in the monetary final quarter of 2016, athletic attire goliath Nike Inc.(NKE) saw its income development cut down the middle because of forex weights, from 12% year-over-year in consistent cash measures to only 6% including real money changes.

To take advantage of the “reflation” exchange that numerous financial specialists are counts on in 2017, you need to represent the headwinds that a solid dollar are making for multinationals at this moment. The most ideal approach to do that is to consider customer plays that do by far most of their business here in the U.S. – for example, Foot Locker Inc.(FL), which has been an uncommon splendid spot in retail throughout the most recent couple of years.

Supported money ETFs

Obviously, in the event that you need a steady portfolio, you can’t just purchase just local centered values. Geographic expansion is similarly as imperative as enhancement crosswise over parts and resource classes. Such a large number of financial specialists keep on holding worldwide plays in light of a legitimate concern for a balanced portfolio, regardless of the possibility that it implies battling a daunting struggle as a result of a solid dollar.

The uplifting news, notwithstanding, is that you don’t need to leave yourself to torment through a solid dollar and a powerless euro when you put resources into Europe. Nor do you need to stress over the yen-dollar conversion standard when you put resources into Japan. That is on account of there’s an entire group of cash supported ETFs to permit financial specialists to put their cash in outside business sectors yet keep away from forex issues.

Consider that Japan’s Nikkei 225 file is up around 25% from its July 2016 lows. The WisdomTree Japan Hedged Equity Fund(DXJ) is up 35% in a similar period on account of assurance from forex issues and a somewhat better-performing rundown of stocks – while the non-supported iShares MSCI Japan ETF(EWJ) is up only 10% in a similar period because of battling a difficult task against a solid dollar.

In the event that you need to differentiate your portfolio comprehensively, you ought to consider supported assets that incorporate the Japan-centered DXJ, the WisdomTree Europe Hedged Equity Fund(HEDJ) to play Europe or the iShares money Hedged MSCI EAFE ETF (HEFA) for developing markets.

Dollar list ETF

In the event that you are searching for an immediate play on a rising dollar as opposed to putting resources into stocks, figuring out how to exchange remote trade can appear like an overwhelming undertaking. Gratefully, there’s the PowerShares DB US Dollar Index Bullish Fund(UUP).

This ETF is attached to the U.S. Dollar Index, which is a measure of the greenback against a wicker container of other worldwide monetary standards including the yen and the euro. It’s a straight money play, however that doesn’t make it straightforward or hazard free. In the event that the dollar debilitates, you’ll lose cash similarly as though you’re putting resources into a stock that has fallen on difficult circumstances. Furthermore, obviously, PowerShares takes a little cut of your speculations en route that indicates 0.8% yearly, or $80 a year on each $10,000 contributed.

Still, in the event that you need to conjecture on the dollar or support against a solid U.S. cash keeping down other worldwide ventures on your rundown, it’s maybe the least demanding approach to do as such for generally financial specialists.

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