Day Trading is a trading strategy where traders open and close positions within a single trading day. The goal of day trading is to profit from short-term price fluctuations in financial markets. Day traders do not hold positions overnight but close all trades before the end of the trading session to avoid risks associated with price changes outside of trading hours.
Key Characteristics of Day Trading:
Short-term Trades: Positions are opened and closed within a single day, often within minutes or hours.
High Trading Frequency: Day traders often execute numerous trades throughout the day, capitalizing on small price fluctuations.
Use of Technical Analysis: Traders utilize charts, indicators, and other technical analysis tools to make trading decisions.
Liquidity Requirement: Day trading typically requires high market liquidity to ensure quick execution of orders at desired prices.
Examples of Instruments for Day Trading:
Stocks: Traders buy and sell stocks on the stock markets.
Futures: Contracts for the future delivery of commodities or financial assets.
Forex: Trading currency pairs on the foreign exchange market.
Cryptocurrencies: Trading digital currencies on cryptocurrency exchanges.
