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Day Trading Forex

by David Hunt

David has over 20 years experience in Forex Trading. His experience has included:

Deputy Treasurer Foreign Exchange at Australia's most diverse forex generator - Qantas Airways
Bank Proprietary Forex Trader - Macquarie Bank
Currency OverLay & Hedging Manager at a large Australian Funds Manager

He is now current President of the Australian Professional Technical Analysts Association.

What is Day Trading Foreign Exchange?

Day Trading Forex Trading

Forex Day Trading is entering a forex trade and exiting in the same trading session or this same trading day as you entered it.

When Can I trade Foreign Exchange?

Because currencies are traded around the clock the official start of the foreign exchange trading day is the end of the previous day - at New York Close - 5pm New York Time.

When is the best time to Trade Currencies?

Now that is a great question! Because currencies have different trading characteristics in different time zones.

The best time to day trade forex is when the market is most liquid.

A country's trading & investments banks and corporations are the primary providers source of Trading Liquidity in the foreign exchange markets. The Corporations are the end users of the currency for capital or current account purposes and the banks are the intermediaries who warehouse and lay off the trading positions.

Hence the best time to Day Trade Forex is when the trading banks in that country are open and most parties interested in that market are trading foreign exchange.

These parties have huge lines of credit that allow them to trade forex without having to physically pay for the currency unless they want it!

How Can Small Traders Trade Foreign Exchange?

Small traders can trade forex in the following ways

Open a bank account in the foreign currency, buy the currency outright and place a deposit
This has the benefit of receiving interest on your money and its risk is limited to what you have in the account - ie it is not leveraged so risk and reward is lower.
Buy the currency and sit on it - this has lowest return - no interest and has a currency risk
margin forex - used by speculators
currency futures - used by speculators.

Both of these speculative methods require the placement of a deposit to allow the speculative trading to be carried out. Traders are margined ie credited or debited for gains or losses of the position versus the current market.

Margin Forex and Currency Futures are leveraged instruments that both increase risk and increase return. Get it right and you are a happy camper - get it wrong and you lose money very quickly. Leverage is a two edged sword. That is why, as a trader, I love to be stopped out early in a trade - its better to be out quickly ad look for another trade.

In the early 1990s I created a trading system based on the WaveTrader software by Bryce Gilmore. I called it the BING system and the big Exporting companies who also used it clocked it at 80% winners with 20 ticks stop loss and 100 ticks winners in 24 Hours. It is a short term trading system based on Time and Price ratios.

Many traders as they get older want to get in and get out quick and have nothing to worry about at the end of the Day.

This is the big advantage of day trading forex and its been made possible by electronic trading, tighter spreads and cheaper brokerage.

Elliott Wave Forex Trading Seminar September 13th in Sydney see http://www.i-deal.com.au for details and bookings.

Like to lean more about forex trading? Call us on 02 9527.4690.

Good Luck and Good Trading

Warning and Disclaimer: Issued by ADEST Trading P/L, ABN 88 083 033 612.

This is general information not prepared for your specific investment objectives, financial situation or needs. Consult a licenced investment adviser before making investment decisions. Past performance is no guarantee of future performance. There is a risk of loss in trading as well as potential for profit. The opinions and methods you will hear today are from Jake Bernstein. The site is based on past historic data and is about methods and education. Jake Bernstein is a private trader and has much experience in trading. You will be taught his theories and opinions on trading methods. In no way is this intended as financial advice or an invitation to trade. Jake Bernstein is a not a Licensed Financial Services Licensee and therefore does not give investment Advice. He is teaching you his trading methods and that is all. You understand that you have to do your own research once you have learned these methods on your own markets. Jake Bernstein and ADEST make no guarantee about how you will perform using these methods. Jake Bernstein is not licensed to give advice or cause you to deal in a financial product in Australia. Please do not ask him to do so. He will keep to his methods. There will be a Licensed Financial Adviser at the Seminar with whom you can consult with about trading decisions. Do not ask Jake Bernstein for his current or future market opinion or anything to do with your own circumstances.

This seminar does not take into account your individual investment objectives, financial situation or specific needs. Before making an investment or trading decision based on any methodology, the investor or trader, should decide with or without professional Advice whether trading meets your investment objective and suits you psychologically, emotionally and financially. Trading & investing in any instrument ie shares, CFDs, foreign exchange, futures, commodities, have a risk of loss that if left open by market closure or lack of proper protective stop losses could result in a loss of all of your capital or more. Traders and investors are responsible for their own decisions and outcomes. Jake Bernstein is teaching you some methods based on what he sees as good for trading. Trading in any market financial or otherwise is a highly risky exercise and is not suitable for all people. Trading may not suit you. By attending this seminar you accept responsibility for your own trading outcomes and agree to research and test any trading method you learn at the seminar before making any trading decisions or committing risk capital to the market.

IT IS YOUR DECISION TO TRADE. THESE MATERIALS ARE FOR EDUCATIONAL PURPOSES and not an invitation to trade. You also agree to read the Product Disclosure Statements issued by your advisor, broker or market maker before trading and consult them as to the appropriateness of trading for you. You also indemnify ADEST. Jake Bernstein and their agents from any losses or consequential damage you may incur from using these methods. You will be asked to sign and indicate you understand & accept this Warning .