Don’t try to set a goal of a specific number of pips per day. The market changes constantly and trying to set certain restrictions on your Forex day trading may cause you to lose the gains from the day or days before.
Start with your mind open and go with the flow. Watch carefully how the market is progressing. Sometimes the market is in the process of consolidating. If a system is consolidating there will probably be less opportunities to increase your earnings.
Learn how to spot when the merging is finished. Sometimes this will lead to a trending day and a lot of money can be made on these days. Sometimes the market will try to fake you out with head fakes or false moves, so watch your indicators closely if divergence happens between the indicator and the price, be careful. Only do a technical trade when you can get a true confirmation.
When a price moves outside of a consolidation it’s called a candle. The best thing to do is wait until that candle closes before you make a trade. Then analyze the closed candles carefully to make a more informed and intelligent trade. When you get the hang of this you will have more profit making trades. These trending days are usually the results of a newsflash that a currency has risen. This newsflash can be from some federal officer or government agency, which can cause a change in the worth of the currency.
The consolidation may break right before this news is broadcasted or posted on news sites. The anticipation causes the breakout. You can tell by the tight range on the charts. It is usually a good idea to wait and hear the anticipated news before you trade.
Do some research in the beginning. Watch the currency through a few days before you start trading. Find out what is the average low and average high, for certain pairs, because each currency has a normal high a low range and you can calculate an average. Back test, by looking at the currency on prior days or maybe even weekly trends. Get your averages down. Once you do the range will be slightly higher when the market comes out of consolidation and you can make some extra pips that day if the market goes into trending mode.
Have a strong trading method, back testing is very important to make an intelligent decision on what to and what not to trade. At the end of the week of trading do an analysis to learn where your stop levels should be. If retractions are larger than you anticipated, don’t trade, just watch until the market becomes more fluid and consistent.
Choosing not to trade when the conditions are not stable can be as important as trading. It doesn’t hurt to step back and watch the markets to make more informed decisions on trading. It’s not a bad idea to chart movements of the currency you want to trade. Knowledge is king; in Forex day trading it is a must. Doing your research is not a waste of time, but if you don’t study diligently, you could be wasting your time but most importantly your profits.