In the first place, we will explain what the trading systems are.
A trading system is a series of steps that tell the trader when to buy or sell a particular currency pair. The basis of a trading system is the observation of market prices and the analysis of various elements (graphical patterns, economic events, etc.).
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It can be said that, to operate successfully in Forex, it is essential to have a trading system. Without this series of steps, you would be adrift and open totally unjustified positions.
Trading systems are based on two types of analyzes popular in the financial market: technical and fundamental analysis. The technical analysis studies the visual elements found in the price chart (patterns, indicators, trends, supports, resistances, among others), while the fundamental analysis considers the economic events that take place around the planet to determine future prices Of currencies.
It is worth mentioning that technical analysis is more popular than fundamental.
Application of intraday trading systems in Forex
Intraday trading refers to transactions that close before the end of the trading day. That means that those who apply this approach (called intraday operators) never leave an open position overnight.
Intraday trading systems provide rules and steps for trading currencies within the short temporalities that make up the day. These systems are designed to run in a fast environment, while ensuring a series of gains.
History of intraday Forex trading systems
Previously, only professional traders employed by large market participants could use intraday trading systems. That means that only banks, mutual funds and large companies could benefit from this method.
However, thanks to the advent of the Internet, intraday trading became increasingly popular among private operators. At present, anyone can learn and apply this method without any problem.
Intraday trading has several advantages, although one of the most obvious is that it is not necessary to pay swaps. These are interest that the Forex broker charges (or pays) for operations that remain open from one day to the next. Swaps can be favorable, although in most cases they are expensive and end up absorbing a large part of the profits.
How to Make Money with Intraday Trading
In intraday trading, the most common is to open several operations of short duration throughout the day. In each of these positions is aimed at achieving slight gains.
You may think that it is an unproductive method, although the truth is that it can be really profitable thanks to an important tool available in Forex: leverage.
Leverage allows traders to open positions for volumes greater than the balance they have available in the account. That way, intraday traders use high leverage to open several short orders and thus increase their profits.
The Best Intraday Forex Trading Systems
Forex intraday trading systems, unlike trading strategies, serve to define the style of your trades. The strategies talk about the details, such as the conditions that must be fulfilled to open or close an operation, the configuration of the indicators, etc.
Here are some of the most popular intraday systems on the market. Although you may think that all these systems are very similar, they actually have significant differences:
This system consists of performing a large number of operations that have a very short duration. The objective of scalping is to generate very small profits that become significant thanks to the enormous number of positions.
This system takes advantage of price declines in a bullish trend. The logic behind this method says you can generate profits if you go “short” just when a bullish move ends.
In this case, the take profit is set at the level where the price is expected to increase again.
Daily pivot point system
This intraday Forex trading system is characterized by opening positions during the hours of lower volatility, to close them when the moments of greater movement arrive.
This system uses fundamental analysis to generate foreign exchange earnings. In the momentum system, your goal is to buy a pair a few hours before an economic event takes place. These kinds of events often affect the volatility and liquidity of currency pairs.
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