An intraday trader is the type who sets an entry position and sets an exit position within the same day. Usually, his positions yield small profits; but, once the small profits are summed up, they will amount to a decent figure.
That’s how an intraday trader goes by. He knows that with every set position, only a small amount can be generated; he knows the uncertainty that is bound his way, but he’s eager to remain as a market participant. With his smart approach, along with a reliable trading platform, his trading profitability is heightened.
Getting to Know an Intraday Trader
An intraday trader takes advantage of the forex market’s volatility; he conceptualizes his trading strategy based on market timing and price momentum. Although there are exceptions (i.e. there are intraday traders who prefer to pursue menial profits with qualitative trading), his focus is on quantitative trading. As mentioned, he revels in small accumulated profits; this is the reason why there is a need for a reliable trading platform.
In certain cases, an intraday trader engages in margin trading; he sets short and/or long positions with a borrowed amount. If his preferred trading platform is unreliable, keeping up with a margin account can be challenging.
Essentially, an intraday trader’s success is relative to the efficiency of a trading platform. If it’s unreliable, it may affect his trading career; if order execution is not accomplished properly (e.g. wrong market timing, delayed execution), profitability can reach a negative downturn.
An Intraday Trader’s Approach
Since his trades give light to market timing and price momentum, an intraday trader can also be considered as a contrarian investor or a reverse trader. With confidence that the forex market will pursue a target direction (i.e. if necessary, a reverse will occur), he sets a position; if the market conditions do not turn around, then he accepts the fact that he’s at a loss. The advantage of being a contrarian with a reliable trading platform is that he can trade in virtually all time frames.
Moreover, a reliable trading platform is supportive of an intraday trader’s techniques. Since he intends to exit the forex market at a suitable time (i.e. usually, it’s before the market closes), his preferred trading platform should enable him the privilege. Otherwise, if he stays in the market too long, he is susceptible to unmanageable risks or negative price differences.
Common intraday trading approaches:
- Guerilla trading
- News playing
- Range trading
- Rebate trading
Contributor: A senior Analyst from FXCC Forex broker has contributed in