Forex or currency day trading has only been accessible to trade for retail traders like you and me over the last twelve years - it is still in it's infancy. Just imagine if you can take advantage of day trading now - just imagine how developed this area will be in a few years time! Discover how to profit from this market now and benefit from developments in the coming years. Exciting times are ahead!

The Forex market is in constant motion - it only closes during the weekend. Consequently there are many different strategies you can develop which can fit into your existing lifestyle. Currency day trading is one of those strategies. Typically a trader will open and close a trade or position during the course of the same day.

OK so you how can you profit from 'reading' a bunch of charts then? To some this can sound technical but honestly, the simpler you make your trading, the easier it will be AND the more profitable you will be!

The trader observes the price and time movement on a chart. These include bars, lines, point and figure, and Japanese candle sticks - the most favored method. Candlestick charts originated from Japan in the rice trade during the 1700s. The method is still used today, together with further influence from ancient Japanese ways and traditions. This chart type will be used in currency day trading as well as currency intra-day trading, scalping methods and other forms of trading.

We can clearly see this evolving in front of us due to live data feed charts and identifying some basic chart patterns. The goal is to trade with minimum risk for consistent and profitable gains - easy to say but a little harder to do! Consider adding the following to your currency charts when day trading.

Channel or Trend Lines
Here's something to make it a little easier. Price movement works in only three directions. Price will move up, down or sideways. You have to decide which of the three ways your chosen currency is moving. You do this by drawing lines on your chart from the high points of each candlestick which has formed over your chosen time period. This will be either the close or the very tip of the shadow formation of the candlestick. Three or more touches in a straight line which can be horizontal (in a channel) or on an angle (a trend line) will indicate one of the three price movement directions.

Support and Resistance
Any currency day trading technical analyst must understand and implement this. Support and resistance are the levels of safety from previous levels (the security net areas spoken about earlier). Both can be defined as the areas where price will move to and then stall. In a rising market price will rise to resistance levels, stall and a possible retracement will occur. In a falling market, prices gravitate to support levels where the possibility of a trend reversal is greater.

The most powerful trades are those where price has stalled at a support or resistance level and then 'break out' giving the trader a move of considerable pip value. With currency day trading, some chart set-ups used on their own can give false indications, which is why a trader should use other charting tools to identify this move better.

So what other tools do you need? Well it's helpful to have confirmation from other types of indicators but taking note the best strategies are the least complex.

Bollinger Bands and Relative Strength Index (RSI)
Both of these will be helpful to you and your trading strategy. Bollinger Bands are good for determining price volatility or relatively how much change has occurred in price movement. An indicator like the Relative Strength Indicator gives you exactly that - the relative strength of price movement. When currency day trading, it's good to note the set up you will want is to make sure these indicators show the values of the extreme levels of the scale. For a stronger indication the RSI should be either at the very top of the scale, or the bottom. If the RSI line is hovering somewhere in the middle, the strength of the indicator and therefore price movement is not great.

This method picks out the most telling indicators and chart movements. Keep your currency day trading as simple as you can - not forgetting the importance of a stop loss and money/trade management strategy. Plan your trades and then execute and trade your plan. Keep reading for more articles on this subject or visit the link below to read more now! To Your Success!