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WHAT IS THE ADVANTAGE AND DISADVANTAGES OF INTRADAY TRADE?

 WHAT IS THE ADVANTAGE AND DISADVANTAGES OF INTRADAY TRADE?
In the Forex market, all private traders are engaged in one thing - profit from the movements of exchange rates. But all people are different, therefore, depending on personal qualities, everyone chooses exactly the style of trade that is closest to him. To whom it is preferable to work daily, another is more approached by cautious trade with a small frequency of transactions. This can be understood only in the course of practical activity, but it does not prevent to know in advance what features different styles and methods of trade have. The most discussed of them is intraday trading (intraday, daytrading).

METHODS AND STYLES OF TRADE IN THE FOREX MARKET
The main parameter of the trading style is the time for holding the deal. Methods for determining the entry point to a position may be the same or slightly different, but the duration of holding the position before closing determines the trading style. The most cautious and long-term is positional trade. In this style, transactions are opened taking into account the fundamental data and indications of indicators on daily or weekly charts. Positions are held up to several months, and the profit is thousands of points. However, for position trading it is necessary to have large capital and great patience.

Medium-term trading involves keeping transactions for a few days or weeks. The fundamental analysis of Forex here already plays a smaller role. Regular monthly economic reports are usually taken into account. To analyze the situation and open positions, charts from hour to day are used. The profit in the medium-term trade is several hundred points. This style of trading is considered the most comfortable, since it does not take much time, and entry points are easy to determine.

The classic definition of intraday trading is the opening and closing of transactions during the day without moving the position the next day. For this style, working timeframes are used no more than one hour. Fundamental factors are almost not important for intraday trading, except for news in the economic calendar. Intraday style implies several different strategies. Basically it's scalping, session trading and trading on the news. Depending on this, the profit can range from several points to dozens.

ADVANTAGES OF TRADE INSIDE DAY
Most beginning traders are technically and psychologically unprepared for intraday trading. However, almost all are initially traded on small timeframes. Intraday trading has its advantages, in addition, it allows you to gain experience faster. Movement of prices, candle combinations, figures of technical analysis are identical on different timeframes. And if a trader has learned to distinguish between them on five-minute charts, then he can also trade on sentry and day time. Trend periods, consolidations, low or high volatility are repeated at different scales.

Trading during the day, the trader fully controls the situation. The peculiarity of this trade style is that it is required to constantly search for optimal levels for opening positions. Then you need to follow the quotes for the transaction and close as necessary. A trader trading in the medium term may miss an important moment for opening a deal, and an intradayer will have time to earn dozens of points. This is especially noticeable during periods of flat or weak trend. For the medium-term trade this is a lull, and for intraday trading - daily profit. If you follow the rule of exit from the market at the end of the working day, then the possible losses will be small. It is desirable to study reliable forex forecasts for every day.

DISADVANTAGES OF THE INTRADAY METHOD
Many criticize intraday trading, believing that it is too risky. However, not the style of trading determines the riskiness, but the levels of stop and the volume of transactions. All stock exchanges use intraday stock trading, when all positions are liquidated at any price half an hour before closing. In the Forex market, it's much easier to trade, but for intraday trading you need to choose highly liquid currency pairs with a small spread. And for scalping, you also need a high rate of execution of orders without requotes. Not every broker provides such conditions.

To trade within a day, the trader needs special efforts - concentration of attention, quick reaction to the events. This style of trading takes all the time, it will not work together with other work. Although modern traders facilitate the work of the opportunity to trade with handheld devices and forex charts online. The number of currency pairs for intraday trading is limited to one to three. A greater number of tracking and analyzing is simply unrealistic.
 

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