Day trading usually involves two types of trading styles known as scalping and day trend trading known as momentum trading.
Sometimes, they can be continuation of each other. For example, the currency price may not be moving fast, or candles may be small and the price often retracing a lot. In this case, it might be prudent to scalp between 5 or 10 pips at one time.
This can often change when suddenly the price takes off in one direction and the candles are also making bigger moves. You can either get in to ride the new wave when price breaks support or resistance, or you could have locked in your 5 pips from scalping move to take better advantage when price moves in your favour.
The latter may not happen, as most times when you try to lock in your pips in non-trending markets, you would be taken out when price retraces against you, but still you have to try and practice locking in your profits and not getting out, as you will not know when the price will take off.
No one ever makes 100% of the move; we all strive to do our best. That is why it is important to have a profit target.
If your target is 20 pips a day, you may need 2-3 scalping trades to make this money depending on the market. If you are fortunate, you could do it in about 10-15 minutes when the market is good and price is trending nicely.
Most important aspect of day trading is the news announcements. The news calendar is very important and every trader must consult it on a daily basis before getting ready to trade. The site www.forexfactory.com is a good source of information and the important news are colour coded in red. There is also a filter where you can filter out non-important currency pairs and concentrate on those important to you.
If you are not familiar with the news trading, then do not attempt it. It is better to stay away from trading 5 minutes before the news. Although it is very tempting to see the price moving dramatically when you are not in a trade, it could be devastating when it goes against you on a wrong side!
Forex trading is unregulated and brokers can spike the market both ways known as a ‘whipsaw.’ i.e price starting one way, getting you in the trade and immediately reversing on the opposite side losing you money.
If you do not have a guaranteed stop, it could wipe out your entire trading capital; and you will not get a refund from your broker.
I have had a misfortune getting caught various times and there was nothing I could do except to learn from this experience and survive enough to trade another day.
Does this mean, it will not happen again? Of course it will. That is how it is and as long as you remember not to get involved in news trading or if you are willing to take this risk; then by all means look at trading the news as an option. I still take this risk but I always manage to use a guaranteed stop loss. Trading without a guaranteed stop is like giving an open invitation to your broker to dip into your trading account.