Intraday transactions refer to entering and exiting the market many times in one day. This strategy can be profitable and requires very fast while you can implement it at any time. Traders transacting within a day (intraday) try to get a large number of small profits by exploiting the daily volatility of the forex market.
These intraday investors entering and leaving the market many times during the day. The risk is low in intraday transactions because they involve positions held only for a short period of time. However one of the disadvantages of this type of strategy is that the gains in each of these transactions are relatively small.
Intraday Strategies based on predetermined ranges
The key for intraday transactions is to identify a seemingly asleep market, a market that is looking for direction. In the absence of important news, a couple of coins generally fluctuate in a range of 10 to 30 pips. This type of traders who transact within the same day is not interested in the news.
When an unexpected event occurs and it affects a currency is invalidated the range in which it was negotiated. Much so that, this type of traders, not having an opinion about the direction of a currency is fixed when there will be scheduled to avoid transactions during those times news.
Intraday Strategies based on events scheduled
On the other side are the traders who transact within the day but want to hear the news. The largest and most lucrative foreign exchange movements come along with news and economic events. Each day, different countries publish economic, such as employment data, inflation, and retail sales among others.
This data often determine the direction of a currency that day. Economic data are difficult to predict, but with good research and instinct for the market, you can sometimes get a big advantage. Identify a trend in the market is an excellent way to operate with economic data. Often a currency may be more vulnerable to a high impact announcement that was not expected, that one yes was waiting.
The important thing here is to have an instinct for the currency that is intended to trade. Before ads, the currency may be near a technical value or psychological value. In other cases, a coin may have already had a very strong movement and running out of momentum. Economic data can trigger a change in the trend too. A good strategy for intraday transactions is difficult to implement it is to operate quickly with economic data. These are published at the same time for everyone in the market. But still, there are traders who use programs called “robots” reading economic data points and transactions executed instantly.
When trading Forex, you begin to perceive what indicators are most important. As a rule, publications, employment, inflation and interest rates are most influencing the market. There are different strategies for intraday transactions. No matter if you are exploiting market volatility or operating with news and events, learn how to interpret economic data and improve the results of their intraday transactions.
Jose Pino Monsalves
Business Development Manager – Tradeview