Forex day trading can be very challenging and very frustrating, especially for the beginner. If you want to succeed in trading Forex, then you need to have an excellent strategy. This may mean doing something that will not always give you the opportunities that you want, but will offer you consistent profits. Probably the most difficult part of Forex trading is sticking to a consistent game plan that allows you to profit without taking unnecessary risks.
Here's a quick Forex day trading strategy that will get you in and out of the market without too much risk. Start by looking at a Forex chart. Wait until you see a significant high, then watch for it to come back down for another significant low. If this low is higher than the previous low, then you are observing what is called a 1 2 3 chart pattern. This pattern is usually an indication that the bar is about to move upwards in the next chart pattern. This is because the pattern has successfully created a new high followed immediately by a new low.
Another day trading strategy for Forex is to drop three separate moving averages onto the chart. Wait for each of these moving averages to cross each other at a specific point. When all three of the moving averages have crossed, you are observing a breakaway pattern that will change the overall bias on the pair. This is an ideal time for an entry point whether it be a short entry point for a long entry point.
Another great chart pattern to observe when day trading is a double bottom. This pattern is indicated by a significant low that is hit twice without breaking support. When this occurs, it is an indication that the pair has reached a low that it cannot break, and must return up. Many traders use a pattern like this as an entry point. For that reason it's a self-fulfilling prophecy.