📖 Day trading in Forex: intraday strategies explained
Day trading (intraday trading) on Forex focuses on short price swings within a single day without holding positions overnight. High liquidity, 24‑hour sessions, and access to leverage open profit potential, yet they also demand discipline, swift decision‑making, and a well‑defined trading plan.
This guide gives advanced traders a practical structure: how to choose timeframes, the rules for entries and exits, which indicator stack to use, and what to verify before clicking “Buy/Sell,” plus ready session playbooks, tables, setup cards, and a journal template.
Quick legend of terms
MTF analysis: multi‑timeframe — mark up on a higher timeframe, execute on a lower one.
Retest: price returning to a broken level.
Divergence: a mismatch between price direction and an oscillator.
EMA: exponential moving average.
VWAP: volume‑weighted average price for the day.
ATR: average true range, a volatility gauge.
ADR: average daily range.
Timeframe summary for intraday
| ⏱️ TF | 🎯 Role | 🗓️ When to use | ✅ Pros | ⚠️ Risks | 📝 Notes |
|---|---|---|---|---|---|
| M1 | Precision trigger | Scalping entry after a signal on M5/M15 | Maximum granularity | High “noise” | Requires very high discipline |
| M5 | Working TF | Active phases London / New York | Balanced signals/noise | False breakouts around news | Filter by H1 context |
| M15 | Working TF | Trending segments of the day | Readable patterns | Fewer setups | Basis for most intraday models |
| H1 | Context / levels | Define the “plan of the day” | Clear structure | Later entries | Key zones S/R and targets |
How to combine timeframes in an MTF approach
H1→M15→M5 . Trend/levels on H1, setup on M15, entry and risk on M5.- H1‑only. 1–2 trades per day from major levels; less noise, more patience.
- M5‑centric. For active sessions; filter by H1 context; avoid trading against the dominant impulse.
- M1‑execution. Use only as a “magnifier” for precise stop placement when a strong higher‑TF signal exists.
Session playbooks
London Open
The first hours of London bring a liquidity spike and directional impulse after Asian consolidation. Strategy — trade with the impulse or a breakout+retest of a key level.
- 📌 Setup: breakout of the Asian range → retest of the level → entry on a confirming candle.
- 🧭 Filter: H1 context (trend of the day), no opposing impulse at the level.
- 🎯 Stop/targets: stop beyond the retest extreme; targets at nearby
S/R or via an ATR projection.
Main point: if there’s no retest, don’t chase — wait for a clean pullback to
New York Overlap
The London–New York overlap can amplify the move or reverse the day’s impulse. Strategy — follow a confirmed impulse or trade the return to VWAP.
- 📌 Setup: deviation from VWAP → mean‑reversion signal (candle/impulse) → entry.
- 🧭 Filter: news — skip the chaotic first minutes after releases.
- 🎯 Stop/targets: stop beyond the deviation extreme; targets — the opposite band/level.
Main point: on strong news days, capital protection comes first; trade only after stabilization.
Economic calendar: how to filter news
- Preparation: mark high‑importance release times for the currencies you trade; add a ±10–15 minute buffer.
- Mode: don’t open new positions before a release; reduce risk on open trades or move a portion to breakeven.
- After the release: wait for structure to stabilize (level retest, return to
VWAP/EMA ) and only then consider an entry. - No‑trade: chaotic wicks, no retest, conflicting signals across TFs — pass.
Core levels for the day’s plan
| Level | How to draw | Why |
|---|---|---|
| D‑High / D‑Low | Previous day’s high/low | Magnets for movement and reaction zones |
| H1 swings | Pronounced local extremes on H1 | Anchor S/R for intraday |
| VWAP | Daily volume‑weighted level | “Fair value” of the day |
| ADR projections | Average daily range from the open | Gauge potential and “fatigue” of the move |
Trade algorithm: from plan to execution
- Determine the H1 context: trend, volatility (ATR), key S/R levels, targets.
- Formulate the scenario: trend day or range; mark hours of elevated liquidity.
- Select a setup on M15: breakout+retest, pullback to EMA, VWAP bounce, reversal at range extremes.
- Calculate risk: stop distance × pip value → position size for a fixed risk.
- Confirm the trigger on M5: price‑action candle, impulse/volume, alignment with the Dollar Index and crosses.
- Place orders: stop‑loss beyond the level/candle, take‑profit by structure; if needed — trailing/partial exits.
- Manage the trade by the plan: don’t move the stop against logic; don’t average without a clear rule.
- Close the position on an exit signal/target; record the result in the journal (setup, screenshot,
R:R , MAE/MFE).
Entry and exit rules: signals, levels, confirmations
- Context → first. Don’t look for entries against a clear H1 impulse without a strong reason.
- Level. Trade at pre‑marked zones: daily highs/lows, H1 swings, local bases, VWAP/EMA confluence.
- Trigger. Price‑action candle (pin bar, engulfing), impulsive breakout, return and retest without an opposing impulse.
- Confirmation. Confluence of 2–3 factors: candle + level + momentum/volume/oscillator; M15/M5 alignment.
- Exit plan. Fixed structural target or active management: partials, trailing behind swings/EMA/VWAP.
- Stop‑loss. Beyond the level/candle boundary; ATR×coefficient when structure is “loose”; don’t tighten without a new fact.
Position management: exit models
Partial exits at R‑multiples
Trim some risk early without choking the potential of a trend day.
- Scenario: close 1/3 at 1:1, move the stop to breakeven, close the second third at 1:2, let the remainder trail.
- Pros: psychological relief; Cons: underperformance on explosive trend days due to early partials.
Main point: set the rule before entry and don’t change it “on emotions.”
Trailing by swings/EMA/VWAP
Let profits run while pinning the stop behind local structures or average‑price references.
- Swing trailing: move the stop behind sequential local lows/highs in the trade direction.
- EMA/VWAP trailing: keep the stop behind EMA “steps” or behind VWAP on a trend day.
Main point: one method per trade; mixing rules leads to chaos.
Time‑stop: exit by time
If price “doesn’t move” for a set period, the scenario is less likely to play out.
- Rule: close the position if after N M15 candles there’s no progress toward the target and the context is changing.
- Use case: low‑volatility days, range trading.
Main point: define the time‑stop in advance and document it in the journal.
Indicators for intraday: working combos and settings
RSI (14): momentum and trend filter
Use the 40–60 zone as a trend filter (above 50 — look for longs, below 50 — shorts) and 30/70 for extremes and divergences; on M15 confirm signals with structure and impulse.
MACD (12/26/9): impulse shifts
Line crosses and the histogram crossing zero confirm reversals/continuations; for a “faster” pace, test more sensitive sets, e.g., 8/17/9.
EMA pack: 9/21/50 (+200 on H1)
9/21 — for pullback entries; 50/200 — trend and average‑price references; confluence of S/R with an EMA strengthens a setup.
VWAP/ATR/BB
VWAP — “fair value” of the day; ATR — size stops/targets to volatility; Bollinger Bands — compression before a push.
Reference: indicators and settings
| Indicator | Parameters | Best signal | Context | Avoid |
|---|---|---|---|---|
| RSI | 14 | Exits from 30/70, divergences | Momentum filter (level 50) | Blind entries without a level/pattern |
| MACD | 12/26/9 | Line cross, zero line | Confirming impulse shifts | Lagging in chop |
| EMA | 9/21/50 (+200 H1) | Pullback to EMA with trend | Trend days | Trading “between” EMAs in chop |
| VWAP | Daily | Deviation → return/bounce | London/NY sessions | Chaotic minutes right after news |
| ATR | 14 | Sizing stops/targets | Adapting to volatility | Ignoring it in risk calculations |
Profiles of liquid instruments (for intraday)
EUR/USD
The most liquid pair; clean reactions to levels in London and during the overlap.
- 📊 Behavior: tidy retests; tracks VWAP closely; respects EMA 9/21 “steps.”
- ⚠️ Risks: false spikes around news; wait for structural confirmation.
- 🎯 Best setups: breakout of the Asian range; pullback to EMA in trend.
GBP/USD
A more “nervous” mover; wide ADR and sharp impulses.
- 📊 Behavior: frequent false breakouts; strong reaction to UK releases.
- ⚠️ Risks: oversized stops; adapt ATR without fail.
- 🎯 Best setups: breakout+retest on an impulsive day; VWAP bounce after an extreme.
USD/JPY
Often trends on a macro backdrop; quality trend days in NY.
- 📊 Behavior: elongated moves; respects H1 structure and daily levels.
- ⚠️ Risks: long consolidations before the push; patience is critical.
- 🎯 Best setups: pullback to EMA 21/50 with trend; swing trailing.
XAU/USD (gold)
High volatility; big moves around U.S. news.
- 📊 Behavior: fast impulses and deep pullbacks; respects levels and VWAP.
- ⚠️ Risks: wider spreads and slippage at peak volatility.
- 🎯 Best setups: breakout+retest with impulse confirmation; deviation → return to VWAP.
Correlations and DXY: a context filter
U.S. Dollar Index (DXY): 📊 a baseline gauge of USD strength. Rising DXY supports shorts in EUR/USD and longs in USD/JPY; falling DXY — the opposite. When DXY and your pair diverge, reduce risk.
Crosses and metals: 🔗 EUR/GBP shows the euro/pound’s relative strength; 🥇 gold often anti‑correlates with USD during macro impulses.
Working intraday setups
Breakout + retest (trend continuation)
H1 context — impulse; on M15 a base forms under a level; breakout, return to the level, confirmation, and continuation.
- 📌 Entry: retest of the broken level on M15/M5 + confirming candle.
- ⚠️ Stop: beyond the retest extreme or base boundary; ATR×1–1.5 is possible.
- 🎯 Targets: nearest S/R; partial at 1:1; remainder — trailing.
Main point: the strength of the breakout is confirmed by impulse and by the absence of a sharp drop back below the level.
Pullback to EMA 9/21/50 (buy the dip / sell the rally)
In a trend, price pulls back to the moving averages, forming a “staircase.” Enter on a candlestick pattern or a small break of a local trendline on M5.
- 📌 Entry: bounce from an EMA in the trend direction with price‑action confirmation.
- ⚠️ Stop: beyond the pullback low/high or beyond the next EMA.
- 🎯 Targets: prior extreme/projection of the impulse; trailing — behind local swings.
Main point: trade only in the direction of the day; a flat market and lack of impulse — “no‑trade” filter.
VWAP bounce / deviation and return
On a trend day, price deviates from VWAP and returns; in a range, VWAP acts as a “magnet.”
- 📌 Entry: a signal of return to VWAP or a bounce from it with the trend, confirmed by candle/impulse.
- ⚠️ Stop: beyond the impulse candle’s extreme/zone of deviation.
- 🎯 Targets: the opposite band/local S/R; on trend — step higher.
Main point: filter the first minutes after news — it’s better to wait for a retest.
Day scenarios: trend / range / news
Trend day
A directional impulse forms early with H1 support.
- 🔑 Triggers: strong breakout, confluence with EMA/VWAP, lack of deep pullbacks.
- 🎯 Play: enter on pullbacks/retests; trail behind swings; take partials.
- 🚫 Invalidation: loss of impulse and a return into the range with a VWAP failure.
Range day
Price oscillates between D‑High/D‑Low; VWAP often acts as a magnet.
- 🔑 Triggers: false breaks at range edges; reversal candles at zones.
- 🎯 Play: counter‑trend trades from edges toward the middle; targets — VWAP/mid‑range.
- 🚫 Invalidation: true breakout and sustained hold beyond a range edge.
News day
Major releases; elevated volatility and slippage.
- 🔑 Triggers: level retests after the first wave; impulse confirmation.
- 🎯 Play: reduced risk; entries only after stabilization; targets closer than usual.
- 🚫 Invalidation: chaotic flow without structure — switch to observation.
Risk management and execution psychology
Common mistakes and anti‑patterns
Overtrading
- “Boredom” trades outside the plan.
- Revenge trading after a stop‑loss.
Fighting the context
- Shorting into a breakout H1 up‑move without signs of weakness.
- Longing into a clear down impulse.
Stop drift
- Dragging the stop‑loss beyond a level without new structure.
- Refusing to realize a loss per plan.
Overcomplication
- Too many indicators with mutually exclusive signals.
- No core “kernel” model.
Pre‑trade checklist
Check this before clicking “Buy/Sell”:
- H1 context is clear: trend/phase, key S/R levels, volatility (ATR).
- The setup matches the day’s plan (breakout/retest, pullback to EMA, VWAP bounce, etc.).
- There is confluence: level + price action + momentum/oscillator; no opposing impulse.
- Risk is calculated: stop distance × pip value → position size for fixed risk.
- Stop‑loss and target are placed; management scenarios defined (partials, trailing).
- News backdrop is accounted for: release times and potential volatility spikes.
- “No‑trade” plan is active: if conditions aren’t met — pass.
Trading journal template
| 📅 Date | 💹 Instrument | ⏱️ TF | 📌 Setup | 🎯 Entry / SL / TP | ⚖️ Planned | 📊 Result (R) | 📉 / 📈 MAE / MFE | 📝 Note |
|---|---|---|---|---|---|---|---|---|
| — | EUR/USD | M15 | Breakout + retest | 1.0860 / 1.0845 / 1.0890 | 1:2 | +1.9 | 6 pips / 34 pips | Early exit before news |
EV: Expected Value — expected value of the strategy (the statistical expectation of returns).
MAE: Maximum Adverse Excursion — maximum adverse price excursion against the position.
MFE: Maximum Favorable Excursion — maximum favorable price excursion in the trade’s direction.
✅ Conclusion
Day trading on Forex is a craft with rapid feedback: the market quickly rewards discipline and just as quickly punishes improvisation without a plan. A successful model rests on three pillars:
Make the system yours: narrow the set of setups, formalize criteria, keep a journal with metrics (
Main point: don’t search for a “perfect indicator” — build a resilient process: context → level → trigger → risk → management → journal.