Day trading guide for beginners - TopAsiaFX

019, Dec 2021

Day trading strategies are also referred to as intraday trading. It means opening and closing positions within one day. Timeframes from M30 to H4 are used in these strategies to analyze the Forex market, although the most common timeframe is H1. Other intervals can be used too, but there is one rule: trade must be opened and closed within one day to avoid swap costs.

What is day trading?

Intraday Forex trading is a type of trading in which a position is kept open for no more than 24 hours without keeping it overnight. This means no swap costs. Any timeframe can be used for analysis, but the most popular time intervals are H1 and H4. Unlike scalping, trades are kept open for several hours - this allows you to assess the situation without emotion and haste and not overdo it at the same time. You don't need a large deposit if you can avoid spikes in local volatility.

Day strategies are the favorite type of trading for novice traders. Brokers have no problems with day trading, which cannot be said about scalping. Price noise is partially smoothed out (there are no local chaotic two-way movements), wave patterns are discernible. And most importantly, you don't need to make hasty decisions, but at the same time, you don't have to wait long for the result.

Intraday trading is speculative, so the financial instruments are mostly currency pairs. Stock and commodity CFDs are more suitable for long-term strategies where trade is kept in the market for 3-5 days. On the other hand, cryptocurrencies are an ideal tool for intraday trading: scalping with them is not profitable due to large margins, while long-term trade carries unjustified risks. And the volatility of 3-5-10% per day bodes quite well for forward-thinking traders.


There are several unspoken rules for day trading. The first one concerns opening and closing trades around the weekend. Day traders skip the first two hours of the European trading session on Monday. After the weekend, the Forex market may open with a price gap: traders are just starting their analysis and outlining their weekly plans.

The first hours of Monday are the least predictable time, but after that, the financial market enters its usual operation. The same concerns Friday. Before the weekend, in the last hours, trades are being closed massively in order to avoid swaps and fundamental risks.

The second rule is to take into account the volatility of the instrument in a particular session. With the H4 timeframe, open trade is likely to overlap with the second session, where the trading volumes can be completely different. During the Asian session, one should pay attention to JPY, during the European session - to European currencies. Continue reading on LiteFinance.