Day trading refers to the practice of taking a position in the market with the aim of making profit before the culmination of the current trading day. A day trader usually buys and sells currencies numerous times a day; looking for few pips profit for every trade executed, before closing all positions at the end of that day.

The aim of a day trader in the foreign exchange market is to make the most of price movements within one trading day. In contrast to long-term traders, day traders normally hold positions for only a few seconds or minutes, and by no means overnight. The most common method of this unique trading strategy is scalping. It refers to the quick and repeated buying and selling of currencies in a matter of seconds or minutes. The aim of a Forex scalper is to maximize profit from slight market movements while minimizing risk. There are several advantages of day trading the Forex market. Importantly, since day trading involves making profits on small changes of the currency exchange rate, there are usually several trading opportunities.

Next, day trading has zero overnight risks. Because positions are opened and closed several times within a single day, economic news and other factors that affect the prices of currencies have no effect on the positions taken. In addition, day trading enables a trader to make profit regardless of the market direction. A day trader normally aims for short-term profits whether the market is bullish or bearish at any time of the day.

On the other hand, there are some disadvantages of this method. Since it entails entering and exiting the marker several times a day, a trader usually pays more spreads (the difference between ask and bid prices). If you are using a broker with a variable spread, then the cost of placing trades can be too high. Another disadvantage is that it is mentally taxing. Identifying potential trade opportunities several times a day can be cumbersome to an average trader. However, with adequate practice, this can be surmounted.

Day trading requires someone with an active personality who can spot trading opportunities at a glance. Forex trading requires analyzing the market for minute by minute fluctuations. In contrast to long-term speculators, successful day traders look for clear short-term currency moves and aims to profit from them. Therefore, when done correctly, day trading can be a very profitable strategy for navigating the Forex waters.