Day trading strategies in Forex are predominantly medium and long term. At first glance, such TSs are unlikely to suit traders who want to open several deals per day and record the result in a trading report every day. On the other hand, trading on the daily timeframe is perfect for those who know how to wait and value the reliability and safety of capital above all else. Let’s look at several daily strategies and try to understand all their advantages and disadvantages
The essence and features of trading strategies on the daily timeframe
The daily timeframe is one of the slowest in Forex. Even more global weekly and monthly are used in trade quite rarely and, mainly, as auxiliary ones. Trades that open on D1 can remain open from several days to several months. Considering that there are not very many truly liquid assets on Forex (7 par majors, a couple of cross rates, gold and several CFDs ), a trader opens deals no more than 1-2 times a week.
On the one hand, such trading, on average, brings less profit than intraday trading or scalping. On the other hand, when trading on D1, a trader does not need to constantly monitor the chart – it is enough to evaluate the changes that have occurred twice a day, in the morning and in the evening. If the strategy involves strict setting of stop loss and take profit, you can limit yourself to just one session a day, which will take no more than 10 minutes.
Trading on daily charts is as close as possible to medium-term investment in the stock market . Even when trading by technical analysis, a trader should consider global fundamental factors. If during scalping you can simply suspend trading at the time of important news releases, then a deal opened for several weeks will certainly be influenced by the results of important economic events.
Because of this, medium-term traders rarely use automated trading systems, preferring to make deals on their own and, if necessary, make changes to them. In short-term trading and scalping, when events develop quickly, it is most effective to strictly follow the TS rules and not try to make decisions on the fly. In trading on the daily timeframe, while the deal is still open, an event may occur that radically changes the situation and makes following the previous rules inappropriate. On the other hand, the trader has enough time to calmly assess the situation and make a new decision, therefore, day strategies give a lot of freedom of choice and improvisation.
Forex day trading strategies
Let’s take a look at a few specific trading strategies on the daily timeframe in order to better master this trading style.
Medium-term TS “Nomad”
The Nomad strategy is quite simple, built on standard indicators and is perfect for novice traders. To get started, you need to set up the following instruments on the chart:
- 2 exponential moving averages with periods of 5 and 12.
- Oscillator RSI with a period of 20 and an additional level of 50.
Moving averages play…