Day Trading
Trading StylesQuick Definition
The practice of buying and selling securities within the same trading day.
Detailed Explanation
Day trading involves opening and closing positions within a single trading day, with no positions held overnight. Day traders seek to profit from small price movements in highly liquid stocks or currencies. This trading style requires significant time commitment, discipline, and often substantial capital. Day traders use technical analysis, real-time news feeds, and sophisticated trading platforms. In the U.S., pattern day traders (those who make 4+ day trades within 5 business days) must maintain at least $25,000 in their accounts. Success in day trading requires strict risk management and emotional control.
Real Trading Example
A day trader might buy 1,000 shares of AAPL at 9:35 AM for $150.25 and sell them at 2:15 PM for $151.50, capturing a $1,250 profit (minus commissions) without holding overnight.