What are Day Traders?
As a day trader, you can be your own boss. You can trade from an office or at home, or even while travelling, thanks to advances in mobile technology. But day trading is not for everyone, and there are some things you should be aware of before you start day trading the financial markets. In this guide, we discuss day trading for beginners and what are day traders.
Definition of Day Trading
By definition, day trading is the regular practice of buying and selling one or more security positions within a single trading day. No position, long or short, is held overnight. Day traders frequently deal in thousands of shares, often with leverage, and look for small-percentage profits on each trade often less than $1 or $2 per share. They take positions based upon their analysis of a stock’s probable price direction within the trading period.
Day trading strategies
Day trading is a popular short-term trading strategy, which involves the buying and selling of financial instruments, with the aim of closing out of the positions by the end of the day to profit from small movements in price.
Day trading strategies can differ from longer-term trading strategies, in that they focus more on profiting from shorter-term movements in the market, as opposed to moves that take place over a number of days or weeks. Day traders need to be continuously focused, as markets can move suddenly in the short term.
Day trading tips
Follow your own rules
Discipline is one of the most important attributes that experienced traders have in common. Keep a watchful eye on your bad habits, and look to resolve them as soon as possible. You are trading in a disciplined way if you decide on a carefully considered set of rules to govern your trading decisions, and then follow them.
Manage your money
Money management is essential when day trading. In fact, it is one of the essential elements of trading over any time frame. Certainly, if you are planning to trade for many years to come, you are going to need to apply successful money management strategies. There are whole books dedicated to this topic, containing many different approaches, and you need to take the time to find a method that you’re comfortable with.
Always use risk management
Never forget to use stop losses to manage your risk when you are placing your orders to enter the market. This is your insurance. You need to be aware of exactly where your stops should be prior to entering the trade. This is a good habit to have and will help protect yourself from trades that go against you.
On a last line to say, above is the answer for what are day traders.