Day trading has been traditionally associated with stock market investing, but as the internet grows in popularity, more and more investors have begun day trading on the foreign exchange, or forex market. Since the forex market is open all day and night for six days a week, investors are able to execute trades at any time, but those who want to make a regular career of investing may decide to place trades primarily during the day.
Deciding When to Trade
Since the foreign exchange market is open during the day and night, some traders may choose to perform the bulk of their trades during the hours when the currency they trade heaviest is most active. For example, if a trader focuses on the British Pound, he may choose to schedule his trading around the hours that the British stock market is open, since this is when the pound’s value may fluctuate the most.
Navigating the Three Areas of the Forex Market
Fx trading is done via three separate sectors of the currency market: the spot market, the forwards market, and the futures market. The type of investing a trader wishes to pursue dictates the market to which he directs his attention. The spot market is used for buying and selling currency, the forwards market is used for trading over-the-counter contracts, and the futures market is used for buying and selling exchange contracts.
Making a Career Out of Investing
Forex demo accounts are a great way for investors to break into the world of foreign exchange day trading. Once traders are familiar with the market and are regularly placing successful trades, they may desire to make investing their primary career. Before doing so, it is wise for investors to get advice from a qualified broker about making the transition to professional forex day trading.