What does an FX day trader do?

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Foreign exchange (FX) day trading is an increasingly popular form of investing that involves the purchase and sale of international currencies. Day traders often use leverage to amplify their positions, allowing them to make significant gains off small investments. However, while they can potentially do very well, FX day trading also carries a high level of risk due to the volatile nature of foreign exchange markets.

In Singapore, there are several different strategies that FX day traders use. However, they must carefully consider the risks before entering any trades. This article will explore what a forex day trader does in Singapore.

Analyse market conditions

Before entering into any trades, forex day traders must first analyse the current market conditions to identify suitable opportunities. It includes reviewing the technical indicators and fundamental analysis to gauge currency movements such as news headlines, economic data releases, current events and other global developments that affect exchange rates. Traders need to understand what factors drive the forex markets to make informed decisions in their trading strategies.

Set entry/exit points

Forex day traders will set their desired entry and exit points for each trade after assessing the current market conditions. It may include setting a stop-loss order or take-profit order to ensure losses or gains are taken when predetermined levels are hit. Setting these limits in advance can help traders manage their risks more effectively. Moreover, traders should adjust their entry and exit points to reflect changing market conditions.

Monitor positions

Once a trade is entered, forex day traders must monitor the position closely. It includes keeping up-to-date with news events and any changes in market sentiment or technical signals that could indicate an opportunity or potential risk in the position. Day traders should also regularly review their positions and adjust them based on current market conditions. Traders should also be aware of potential news events affecting their positions.

Use leverage

Forex day traders in Singapore can use leverage to increase their trading position and potentially take advantage of new opportunities. Leverage allows traders to increase the position they can trade with, but it also amplifies their risk exposure if the position moves against them. Therefore, traders must understand how leverage works and manage their risks effectively. Furthermore, traders should only use leverage responsibly and within their risk tolerance.

Create a trading plan

Forex day traders should create a detailed trading plan which outlines entry/exit points, risk management strategies, desired returns and other details such as the assets they intend to focus on and suitable times for entering trades. A well-crafted trading plan can help traders stay disciplined, organised and focused on achieving their goals. Additionally, day traders should review their trading plans regularly and adjust them based on market conditions.

Benefits of day trading forex

While there are several benefits, traders must also research potential risks to day trading forex. Knowing the risks and benefits of day trading forex will help traders make informed decisions and manage their risks effectively. Forex day trading can be an exciting and rewarding venture when done correctly.


Traders can use leverage to increase their trading capital and potentially make more significant returns. Leverage also allows traders to enter into trades with smaller initial investments, meaning that even small movements in the market can lead to them doing well.


The forex markets are highly liquid, meaning traders can access sufficient liquidity for prominent positions. It makes it easier for day traders to enter and exit the markets quickly without worrying about slippage or significant price gaps between the bid and ask prices.

Low costs

Forex day trading is typically associated with low costs compared to other forms of trading, such as stocks or futures. It includes spreads, commissions and other trading costs that can add significant amounts when trading other assets.


Day trading forex offers traders the potential to make trades quickly. With quick market access, day traders can take advantage of market opportunities as they present themselves.


Forex day traders can choose when to enter and exit their trades, allowing them to take advantage of market conditions and potentially maximise their advantages. Moreover, traders can adjust their trading strategies based on changing market conditions to stay ahead of the competition.

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