Forex Day Trading Rules for Beginners

Forex day trading is a famous short-term strategy in the field of trading where a person sells and buys currency pairs in the particular time span of a single day to get a high profit from movements of small prices. Day trading is a smart style of trading. The trader works on a single trade in a day and closes the trade when the day gets over. Forex day trading is best for those traders who have a huge time during the whole day to keep watch on a trade.

The trader does technical analysis, implements different strategies, and keeps track of trade. People who give priority to starting and ending the trade in a single day can be successful forex day traders. If you are doing a job, you can’t be a forex day trader. Consistency in keeping an eye on trade and evaluating the situation, like movements of prices and monitoring the charts of trading, are the keys to successfully doing forex day trading. As a beginner in Forex Day trading, one can perform well by sticking to a particular trading strategy, using discipline, the proper focus, and control.

Basics of Forex Day Trading


Forex Day trading is one of the riskiest approaches to the economic markets. Forex Day trading requires quick evaluations and decisions. It is mandatory for a trader to have the ability to read all the charts expertly to prevent his trading from slowing down. Risks involved in forex day trading are high because it involves strategies that are short-termed. Chances of loss are higher if the trader is impatient and unfocused.

Day Trading

Basically, forex day trading gives the opportunity to people to participate in the marketplace globally, which returns quick profits. They are two factors that are very important and related to short-term trading are “liquidity and volatility”. Traders who do short-term trading highly depend on these two. Volatility is the measurement of variations in market movements. Liquidity is the facility through which a trader trades an asset at a good price. Profiting or losing depends on how much a trader follows the rules and regulations and applies strategies properly.

If a beginner follows certain rules for Forex Day Trading, he can earn a high profit.

1- Basic knowledge about Trade in Forex Market:

Beginners must have knowledge about trade in the forex market. They should know how work is being done in the forex market, how buying and selling are key factors in this market, and what are basic terms of forex day trading are, like bid-ask spread, pip, lot, leverage, currency pair, and margin. They should keep themselves updated regarding all the new strategies of forex day trading.

2- Things That Move Forex Day Market:

Beginners must know what the things that move the forex day market are. Prices of currencies are set by the demand and supply of buyers and sellers. Certain other forces also play an important role in the forex day market, like currencies’ demand is influenced by the policy of the central bank, the political environment of a country, and interest rates.

3- Major Currencies being used:

They should have knowledge about major currencies being used in forex trading. Currencies being used in forex day trading are:

  • The US Dollar
  • The Euro (EUR)
  • The Japanese Yen (JPY)
  • The British Pound (GBP)
  • The Swiss Francs (CHF)
  • The Canadian Dollar (CAD)

4- Systems in Forex Day Trading:

They should know what systems in forex day trading, i.e., direct dealing, trading with brokers, and matching systems are.

5- Selection of Best Time Frame:

They should understand what’s the best frame of time for forex day trading. Usually, 5 minutes and 15 minutes are considered to be the best time for day trading. Because intraday traders can do an analysis of the market in a short period of time. For forecasting the movements in the market, three types of analysis are used:

  • Fundamental analysis.
  • Technical analysis.
  • Sentimental analysis.

In fundamental analysis, the trader does an analysis of political, economic, and social factors that have a huge impact on the supply and demand of currency. Whereas, technical analysis is about the movement of volume and price. Furthermore, sentimental analysis is an analysis of the mental approach and sentiments of investors and traders.

6- Design Effective Strategy:

Beginners should try to plan effective strategies with low risk. The minimum risk reward should be 1:3. Nothing in forex day trading and be taken for granted. Every single factor has a huge impact on the profit and loss of traders. If a trader doesn’t completely understand the basics of the forex market, doesn’t have a good command of analysis, and does not choose the right time for trading, chances of loss are higher than those who understand all these factors better and apply the techniques efficiently. So, the strategy you are choosing and applying should be taken into great consideration.

7- Keep a Record of all the Trades:

Beginners should keep track of all the trades they have been doing. They should make a trading journal of their trading. This will be a safe record of all their trades. From time to time, they can look back at their trades and analyze their good points and mistakes. They can analyze the strategies they need to improve and the flaws they don’t have to repeat. This will make them efficient traders with the passage of time. This will also increase their analytical skills in the field of trading.

8- Money Management:

Beginners should try to create a grip on money management. Money management in forex day trading has no hard and fast rules. These are the rules that a person designs for himself. These include, how he has to use the money effectively to minimize all the losses and maximize the profits and how he has to grow his trading through proper money management.

Trade in Forex Market

Money management is often mixed with risk management. In fact, these two are different terms. Risk management is about quantifying, analyzing, and identifying all the risks associated with the trade. At the same time, money management is all about saving or protecting money from loss. Good money management skills help in minimizing loss, maximizing profit, and successfully running the trade.

9- Understanding of Trading Psychology:

Trading psychology should be given high importance in the beginning. It includes all the feelings and emotions that a trader will have to go through while trading. Trading psychology is complex, but a trader masters it with the passage of time. Some traders

 Try to keep themselves positive, but some can’t overcome their fears, emotions, nervousness, and negative thoughts. Such traders close the trades prematurely. They also face “FOMO” (fear of missing out). Additionally, they feel huge emotional and mental stress as the market moves or reverses in the opposite direction. Traders who manage their emotions well, keeping their mind toward positive aspects, usually become more skillful traders.

10- Consistency:

Beginners must know that they need to be consistent in order to become a millionaire. One can’t become a millionaire in a short period of time. They need to be consistent in the market. Also, they have to bear losses. Business is all about profit and loss. You can’t earn profit every time. You also have to face the losses. Sometimes you’ll have to see your strategy not working. But you should not lose confidence. Your mistakes make you skill full and a master of anything. If you remain consistent, there are higher chances that one day you will fully master the skill of trading.

11- Don’t be greedy:

Don’t be greedy in forex day trading. Under the basic principles, analyze, evaluate and apply a trading plan. If your plan works, it’s good. If it doesn’t, accept that too. You can’t take revenge on the market. Keep your mind and emotions in control. Don’t keep unrealistic expectations in mind.

12- Risk Management Strategy:

Beginners should follow a proper risk management strategy. Before starting a trade, they should know how much risk they can manage according to their age, experience, goals of investment, and knowledge related to forex trading. Tolerating the risk is all about making sure that whatever situation comes, you can control yourself really well. You can cope with any situation. For this purpose, beginners should set the ratio of risk and reward to a minimum of 1:2. When they know about the risk/reward ratio, there are higher chances that they’ll get profit.


In short, forex day trading is the process of trading currencies in which a trader opens and closes positions in a single day. He sets a time frame to open and close the positions with the help of technical analysis and tools. Beginners should learn the basic terms of forex day trading. They should set a trading plan, apply that plan by using technical analysis and be ready for all the profits and losses.


Saman Ali

Saman Ali is a Professional Financial Researcher, Quantitative Analyst and an Experienced Writer for more than 5 years. Saman’s main passion is for Cryptocurrencies, Stocks, Forex and Blockchain Technology. She holds an MBA in Finance and has specializations in producing high quality content about Cryptocurrencies, FX, Broker’s review, Price Predictions, Fundamental & Technical Analysis, and Educational Content.

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