Day Trading
Day trading is a style of investing where a person buys and sells financial assets within the same trading day, aiming to profit from short-term price movements. Positions are usually closed before the market closes, so nothing is held overnight.
Key features of day trading
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Very short time frames: Trades can last seconds, minutes, or hours
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High frequency: Multiple trades in one day
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Common assets: Stocks, options, futures, forex, cryptocurrencies
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Tools used: Charts, technical indicators, real-time data, trading platforms
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Leverage: Often used, which increases both potential gains and losses
How day traders make money
Day traders look for small price changes and try to:
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Buy low and sell high (or sell high and buy back lower)
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Take advantage of volatility, news, or market momentum
Risks
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High risk: Most beginners lose money
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Emotional stress: Fast decisions under pressure
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Transaction costs: Fees add up quickly
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Leverage losses: Can exceed initial investment
Day trading vs long-term investing
| Day Trading | Long-Term Investing |
|---|---|
| Short-term | Long-term (months/years) |
| Active, fast-paced | Passive, slower |
| High risk | Generally lower risk |
| Requires constant monitoring | Minimal daily attention |
Bottom line
Day trading is not gambling, but it is very difficult and requires education, discipline, capital, and risk management. It’s generally not recommended for beginners without proper training.