What is day trading & how does it work?

Day trading involves frequently buying and selling securities throughout the trading day. Day traders attempt to anticipate and make money from intraday price changes in assets like stocks, bonds, commodities, and exchange-traded funds. As the name suggests, day trading is a short-term investment strategy.

What is intraday trading?

Intraday trading differs from the typical form of stock investing where an investor holds a security for an extended period of time. When an investor day trades, they typically open and close their positions rapidly within the same day. A day trade is a term describing the buying and selling of the same security intraday.

What makes a successful day trader?

Successful day trading demands scrutinous planning: hours in front of the computer checking the market, keeping up to date with news, maintaining a spreadsheet, and plotting out your next move; It requires a large sum of capital: Day trading stocks in the U.S. requires a trading account balance of at least $25,000.

What data do day traders use?

Most day traders use price charts to decide when to execute trades. Many also rely on Level II trading data, which offer greater insights into the level of trading interest. 3 Some day traders may focus on specific news events or statistic tendencies they have researched.