Day Trading & Forex Forum

A good rule of thumb for the beginner Day Trader to spot trading opportunities is to use the 4 hour time interval. It represents a decent amount of time for prices to evolve wider ranges that are tradable. During a 4 hour period, currency pairs often exhibit ranges that provide the enough PIP distance between Resistance and Support. to achieve Day trading goals.

So if we estimate that we can expect 2 opportunities per currency pair during any given 4 hour period, we can expect 16 trading opportunities that can justify putting on a trade. If we take extreme rationing of these opportunities and select only 1 trade per 4 hour period per currency pair, we have more than enough to allow a person to take Forex Day trading as a serious opportunity. A common occurrence is a cluster effect where the action in one currency pair cascades across all of them and, suddenly, almost at the same time, there are numerous opportunities! The distribution of trading opportunities, however, is not random, and patience in waiting for the right opportunity is a worthy skill to acquire. 
Pulling the Trigger

Putting on the trade, after all, is what the analysis leads to, but it is not a spontaneous event. While there is no single rule of action on what a price trigger is, we can narrow conditions to be such that the trade is reasonable and can be supported by a combination of technical factors. For example, in the chart below, the price is probing the lower channel line and a trade going long would coincide with a confirmation that the position is oversold. Notice that in the example below, Relative Strength Indicator is breaking its own trend line. This is a very useful confirming tool when oscillators are used in technical analysis.

During any given day in Forex Trading, patterns emerge inviting a trade. The skilled trader waits for a high probability trade where confidence is high that the trade will work. Contributing to confidence may very well be the trader's own psychological mind set and optimism. Ultimately, the Profit and Loss Chart will demonstrate whether one is engaged in wishful thinking or a winning game. Whether one looks for a quick grab of profits that will pay for a dinner date, or for a trade that makes the month's mortgage payment, Day trading Forex has embedded in its market patterns, the potential for achieving a variety of trading goals. Forex Day trading offers a range of opportunities but there is an entrance requirement - The Forex trader who wants to be successful needs to come armed with a box of tools, and a set of rules.