Forex vs Day Trading Differences and Similarities

As the name suggests, day trading is a popular form of trading in which traders buy and sell financial instruments online in the period of a single day. Most day traders make profits through small price fluctuations. Since day traders don’t hold onto assets for longer periods, the risk level isn’t too high. Although, day trading requires constant attention and is more suitable for those who can invest time as well as capital.

What are the best instruments for day trading?

The best thing about having a day trading strategy is that you can make use of short term price movements on any instrument you like. If an instrument is volatile, it’s more suitable for day trading because then day traders can benefit from the price movements.

Forex or foreign exchange is the world’s largest decentralised market, where people exchange currencies in the hope of capitalizing on market movements. Forex traders exchange currencies in order to benefit from the shifting prices of currency pairs. For instance, if AUD seems to be rising in value while GBP seems to be falling, a Forex trader will trade GBP/AUD in order to profit from the price movement.

While Forex trading is simple and can be done with high leverage as well, the trading options are limited because nearly the entire Forex market is made up of 8 major currencies, including USD, GBP, & AUD.

The main difference between day trading and Forex is that Forex is a trading instrument that deals with currency exchanges, whereas day trading is a form of trading or a trading strategy in which you buy and sell instruments in a single trading day. The similarity between day trading and Forex is that they’re both effective tools for an investor who wants to trade with reduced risk.

Here at CAPEX, you can day trade CFDs on a wide range of instruments, including Forex. Not only does this allow you to avoid higher risk, but it’s also a great way to obtain experience in a number of markets and build a trading portfolio without emptying your pockets.

In contrast, Forex can be used as long-term investments as well. Some traders like to buy and HODL currencies in the hope that they’ll make decent profits in a few years from now. HODL is an acronym for “hold on for dear life,” suggesting people not to impulsively sell when the price of a cryptocurrency sees a significant variation.

Factors influencing Forex Trading

Important political developments

Tax changes

Consumer & producer preferences – CPI or PPI reports

Interest Rate Decisions - Bank of England MPC Announcements, Fed Interest rate Decisions, etc.

Other market-related FX news

Visit our Special Articles page for the latest market news on cryptos, stocks, indices, and more!

If you’re looking for an investment that doesn’t demand your constant attention or want to invest for longer periods of time, we suggest exploring Forex further. However, if you want to play it safe and would like to invest for shorter periods of time – despite the fact that it requires more attention – day trading could be the right strategy for you.

No instrument or strategy is better than another, and each strategy and the trading instrument has its pros and cons. So, you need to see which trading instrument and which trading strategy aligns perfectly with your trading goals in order to decide how you can begin trading.

Here at CAPEX, you can day trade Forex through CFDs along with numerous other instruments.

Not only is this a great way to diversify your trades and obtain trading experience in a number of markets, but it’ll also help you decide which market and trading style suits you and which doesn’t.

Trading with CAPEX.com

The great thing about CFD trading online is that you can do it anywhere there is a secure internet connection. Inevitably, this means that mobile trading has proven particularly popular as traders can conveniently open and close positions from their mobile or tablet as and when it suits them.

Discover the functionality to ...

Trade more than 5,000 CFDs

Manage your investment horizon

Set take-profit or stop-loss limits

Open short and long positions

No fees for opening and closing positions

Trade with and without leverage (StoX)

Start Trading Now

• We offer over 5,000 tradable instruments, allowing traders to diversify their trades with ease.
• CAPEX offers the lowest trading costs, allowing traders to keep most of their profits to themselves.
• Our trading platforms CAPEX WebTrader & MetaTrader 5 (MT5) are user-friendly, highly intuitive, and easily accessible – the perfect platforms for day traders.
• We offer customer support seven a week through phone, live chat, and email. So, if you’re ever stuck, you can simply get in touch, and our support team will resolve your issue.
• Our webpage and trading platforms have several learning tools, including an online trading school where you can learn how to day trade effectively.
• We offer excellent demo trading accounts where traders can practice trading until they feel confident enough to actually invest.

Register

Register an account on CAPEX.com and start trading.

Verify

Send over your documents and verify your account.

Deposit

Login into your CAPEX.com account and deposit money.

Trade

Start trading with CFD’s and over 5000 other instruments.

Register Account